(By Mani) G&K Services, Inc. (NASDAQ:GKSR) raised its quarterly dividend by 50 percent to 19.5 cents a share, payable on June 22, 2012 to shareholders of record at the close of business on June 5, 2012.
The new dividend rate marks the company's seventh consecutive year with a dividend increase and offers a yield of about 2.5 percent at a payout ratio of about 48 percent.
The dividend yield compares favorably to 5-year and 10-year bonds issued by Treasury. Treasury offers yields of 0.76 percent, 1.83 percent and 3.04 percent for 5-year, 10-year and 30-year bonds, respectively.
Meanwhile, AAA-rated municipal bonds are giving returns of 0.77 percent for 5 years, 1.64 percent for 10 years and 2.85 percent for 20 years. In addition, AAA-rated corporate bonds offer yield of 1.54 percent, 3.66 percent and 4.86 percent, for 5,10 and 20 year periods, respectively.
The company's price-to-earnings ratio came in at 18 percent, lower than the industry average of 23 percent. Debt-equity ratio stood at 24 percent, compared to industry's 1 percent.
The company delivered a returns of 14.86 percent in the past one year and 57.01 percent in the last 3 years.
Minnesota-based G&K Services provides branded uniform and facility services programs in the United States and Canada. Its facility services programs include floor mat offerings, such as traction control, logo, message, scraper, and anti-fatigue.
Shares of G&K have gained 6 percent year-to-date and are trading between $24.24 and $38.65 during the past 52-weeks.