Monday, June 27, 2011

McGrath rents, symbol MGRC dividend machine for June 27, 2011

Rents are a common source of income for we investors who depend not on our work for income but who depend on the cash our investments create.  With McGrath rents, symbol MGRC, we are talking about renting classrooms, tanks for hazardous materials, even rentals of environmental testing equipment.

Like many companies that qualify as dividend machines, smaller companies tend to share more of their excess cash with their investors than do large growth companies.  This sharing of income gives you a good feeling about the basic concept of capitalism…not crony capitalism, but basic capitalism. Without capitalism, you and I as ordinary investors would not be able to share in the profit of another person’s idea and success.

McGrath has been around since 1979, earns $1.62 per share per year, and will pay a quarterly dividend of $.23 on July 29, 2011 provided you own the stock by July 13, 2011.  MGRC’s dividend yield is 3.12% based on the closing price on Friday June 24, 2011 of $27.01.  MGRC is a very affordable stock to own.  Debt to equity (D/E) ratio is .88.  Like all companies that qualify as dividend machines, MGRC has raised the dividend every year for at least five years.

I like this company as a diversification play for income investors like you and me.

Very Truly Yours,
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