Last month, Meridian Bioscience (NASDAQ:VIVO) made Forbes' "200 Best Small Companies" listing for the fourth time. The achievement crowned another standout fiscal year for a company with a market cap of just more than $650 million.

The Cincinnati-based life science company develops, manufactures, and distributes diagnostic test kits for research centers and hospitals. The company has seen its stock price appreciate 27% over the past twelve months, and it reported a record fiscal 2006 on Nov. 15.

The company's key highlights included an increase in net sales and EPS for FY 2006 of 17%, and 31% over FY 2005. Meridian also announced its intent to increase its FY 2007 cash dividend by 39%, and reaffirmed its FY 2007 guidance of net sales between $118 million and $123 million. The dividend increase is the fifteenth time the company has increased its dividend rate since it established a regular dividend in 1991, and it represents a payout ratio of between 75% and 85% of Meridian's expected net earnings.

The company is in mint financial condition, and its balance sheet carries a current ratio of 3.9. In 2006, Meridian saw gross and operating income margins of 60% and 25%, respectively. The company experienced strong growth in its diagnostics business and realigned its sales teams in its life science business in an effort to maximize revenue growth in 2007. Meridian also signed a collaborative agreement with Merck KGaA for a line of diagnostic tests to detect enteric pathogens.

It has been a strong year in general for companies engaged in diagnostic products. Abbott Laboratories (NYSE:ABT) and Becton Dickson & Co. (NYSE:BDX) are two other such companies that have also seen their stock prices run up close to 20% over the past 52 weeks. While Meridian has a much smaller market cap than the other two, its 14.5% year-over-year revenue growth might offer Fools more upside potential than Abbott or Becton Dickson, which have experienced year-over-year revenue growth of 3.5% and 7.8%, respectively.

With the increased dividend, Meridian presently has a dividend yield of 2.6% that will pad the already vibrant returns the company has turned in for its shareholders. The company's dividend amount itself has increased 256% during the past five years. Given the company's marked consistency in growing its earnings and dividend payouts, I expect another big year in 2007 from Meridian.

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Fool contributor Billy Fisher does not own shares of any of the companies mentioned.