McGrath RentCorp (NASDAQ: MGRC) (the “Company”), a diversified business to business rental company, today announced revenues for the quarter ended March 31, 2012, of $78.9 million, an increase of 8%, compared to $73.0 million in the first quarter of 2011. The Company reported net income of $9.9 million, or $0.39 per diluted share for the first quarter of 2012, compared to net income of $9.6 million, or $0.39 per diluted share, in the first quarter of 2011. Dennis Kakures, President and CEO of McGrath RentCorp, made the following comments regarding these results and future expectations: “Our Company-wide 10% increase in rental revenues for the quarter from a year ago reflects continuing favorable business activity and rental revenue increases in both our tank and electronics rental businesses. This is McGrath RentCorp’s 7th consecutive quarter of double-digit, year over year, rental revenue growth coming out of the Great Recession. Despite a 7% increase in company-wide operating income, EPS was unchanged from the prior year because of higher interest expense and a higher diluted share count. Adler Tank Rentals, our tank and box division, rental revenues increased 33% to $16.2 million for the quarter, from $12.2 million a year ago. Divisional income from operations increased 36% year over year to $8.2 million. The strong increase in rental revenues and income from operations were directly related to continuing overall favorable business conditions and approximately 34% more equipment, by dollar cost, on rent from a year ago. Despite lower business activity levels in Northeastern gas fields, Adler’s other regional operations all experienced favorable year over year growth. Utilization for the quarter fell to 76% from 86% a year ago, primarily due to lower gas field activity and some seasonality. It’s important to keep in mind that Adler annual utilization for the three-year period from 2009 to 2011, was 66%, 76% and 86% respectively. We are still learning what normal utilization levels will look like over time for our tank / box rental business. We are working to redeploy this idle rental equipment, and are pleased with the number of potential opportunities we are experiencing.
The DividendRank formula at Dividend Channel ranks a coverage universe of thousands of dividend stocks, according to a proprietary formula designed to identify those stocks that combine two important characteristics — strong fundamentals and a valuation that looks inexpensive. McGrath RentCorp presently has an excellent rank, in the top 25% of the coverage universe, which suggests it is among the top most "interesting" ideas that merit further research by investors.
Looking at the universe of stocks we cover at Dividend Channel, in trading on Monday, shares of McGrath RentCorp were yielding above the 3% mark based on its quarterly dividend (annualized to $0.98), with the stock changing hands as low as $32.61 on the day. Dividends are particularly important for investors to consider, because historically speaking dividends have provided a considerable share of the stock market's total return.