McGraw-Hill (NYSE:MHP), textbook publisher and keeper of the Standard & Poor's brand, wrapped up its fiscal year yesterday. Does it still deserve the five-star rating it's received from the Motley Fool CAPS community? Let's find out.

Fourth-quarter net sales grew 3.4% to $1.6 billion. Operating income likewise grew 3.4% to $326.1 million. Net income was $204.8 million, or $0.56 per diluted share, a year-over-year gain of 12%.

For the full year, the top line advanced 4.2% to $6.3 billion. Operating income rose 3.9% to $1.4 billion. Net income was $882.2 million, or $2.40 per diluted share, an 8.6% increase on a reported basis. McGraw-Hill also incurred various charges during the year, totaling $0.21 per share.

Two of McGraw-Hill's three operating segments posted operating-profit declines for the fiscal year. The education segment saw a huge drop of nearly 20%, while information and media's profit base decreased almost 18%. Financial services was the lone gainer, advancing its income by 18%. Various charges and a revenue-timing issue hurt operating profits in the declining segments.

McGraw-Hill has several valuable brands under management -- particularly Standard & Poor's, an unquestionable icon of financial information and famous indexes. The company also owns the BusinessWeek franchise, J.D. Power and Associates, and Capital IQ, along with four ABC-affiliated TV stations. As my Foolish colleague Emil Lee observed in a Fool on the Street article, McGraw-Hill's competitive advantages make it an interesting long-term bet, even in the face of competition from Moody's (NYSE:MCO), Pearson (NYSE:PSO), Scholastic (NYSE:SCHL), and FactSet (NYSE:FDS).

Besides brand equity, Fools should also study McGraw-Hill's operational cash flow. The company's latest 10-Q, covering the nine-month period ended Sept. 30, 2006, reported roughly $951 million in net cash from operations. When I add the company's capital expenditures, acquisitions, pre-publication investments, and dividends paid to shareholders from that period, I get a total of approximately $452 million. That makes McGraw-Hill's cash-flow generation more than adequate for these value-enhancing initiatives. A check of last year's 10-K shows a firm pattern of such strong cash flows for the past few fiscal years.

Does McGraw-Hill enjoy sharing the wealth with its shareholders? You bet. According to the company's investor site, from 1974 until 2006, McGraw-Hill's dividend has experienced an average compound annual growth rate of 10.3%. You've got to appreciate a company so dedicated to returning real cash to its investors. I wouldn't be surprised if management continued this dividend-raising habit well into the future.

McGraw-Hill's latest earnings report wasn't stellar, considering some segments' weak results, but don't overlook the context of the charges involved and the revenue recognition change. Furthermore, remember the company's commitments to its dividend increases and efficiency-boosting restructuring plans. The company also foresees double-digit earnings growth in the coming fiscal year, and new strength in its education operations.

It's not the most exciting company, but overall, McGraw-Hill seems to have a promising future. I'm a bit concerned about its price, though; the stock's currently yielding approximately 1.1%. After a cool run over the last 12 months, potential investors might want to wait for a pullback and get in at a higher yield.

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Fool contributor Steven Mallas owns none of the companies mentioned. As of this writing, he was ranked 5,789 out of 20,856 investors in the CAPS system. Don't know what CAPS is? Check it out. The Fool has a disclosure policy.