Monday, February 28, 2011

Dividend Machine, Utah Medical Products symbol, UTMD

Every income investor looks for a company whose stated purpose is to increase income to its shareholders. Utah Medical Products is that kind of company. I like it enough to make it the fifteenth company in my fifty two dividend machines I will profile for income investors.

Utah medical products manufactures and distributes disposable medical equipment and supplies. They not only enrich income investors, they protect against hospital infections through their product line.

UTMD is a small company with only 165 employees and I have blogged about the virtues and pitfalls of small companies versus large companies. I think you should have both in your income producing portfolio. In spite of being a small company, UTMD has 100 international distributors which provide a nice piece of diversification for us.

Let us look at the details. UTMD earns $1.66 per share. The new dividend which is payable on April 5, 2011 if you own it by March 16, 2011 is $.235 for a yield of 3.38% based on the closing price of $27.55. 

The dividend has increased every year for at least 5 years as is required of companies that we characterize as dividend machines. In addition, UTMD gave income investors a sweetened dividend in December of 2010 of $.96 per share. Their D/E (debt to equity) ratio is a mere .30.

This an excellent company to consider for the part of your portfolio dedicated to income.

Very Truly Yours,