HCSG - This Dividend Growth Stock Seemed Stable But Just Suspended Its Payouts
It can be tempting to think that because a company has a strong track record of paying and increasing dividends the trend will continue. But this can be a dangerous assumption to make, especially when a company's fundamentals don't appear to support the dividend anymore. A great example of that is what happened with Healthcare Services Group (NASDAQ: HCSG) in February.
Healthcare Services' business centers around housekeeping and dining services it offers to healthcare facilities. It's not a terribly exciting business to invest in, but it has been a stable enough one for the company to be able to afford to pay a high dividend, and continuously increase it for years. Unlike many dividend growth stocks that raise their payouts every year, Healthcare Services had a streak that saw it raise its payouts even more frequently -- every quarter . In October 2022, the company announced a 77th consecutive increase in its payouts.
When I wrote about the stock last year, its streak was at 75 , and even then there were signs that the company's financials simply weren't strong enough to continue that payout and keep the streak going for much longer.
For further details see:
This Dividend Growth Stock Seemed Stable, But Just Suspended Its Payouts