Mullen Group Ltd 2

I will continue my review a new small cap dividend paying stock (TSX-MT). I have not invested in this stock, but I like to look at recommended small cap dividend paying stock to see if they would be a possibly good investment now or in the future. The other thing to mention about this stock is that it recently converted from an income trust and has decreased it dividends.

The first thing I like to look at is the Insider Buying and Insider Selling reports. What I found was selling to the tune of 7.2M. However, this was by a single director, who was retiring from his directorship. This was done near the end of 2009. There was also a tiny bit of Insider Buying about one year ago. Recently, there has been no Insider Buying or Selling action at all.

When I look at the 5 year average low P/E Ratio, I get a ratio of 8.6, which is quite low. The 5 year average high P/E ratio is 17. I get a current P/E ratio of 15.3 which is based on earnings estimates and a forward P/E Ratio (for 2011) of 12.5. This P/E ratio is a bit high, but earnings are still recovering from the recession. Next, when I look at the Graham Price, I get one of $17.52. This is almost 19% higher than the current stock price. This would show a good current stock price.

Next, I look to the Price/Book Value Ratio. For this ratio, I get a current one of just 0.97. That means the current stock price is lower than the Book Value. The P/B Ratio is just 50% of the 10 year average P/B Ratio of 1.94. The last thing to look at is the dividend yield. Currently this stock has a dividend yield of 3.5%. The 5 year average is 6.5%, because this stock used to be an Income Trust. I show point out that this stock’s dividend yield was often under 2% in the past before it was an income trust. However, I think we should focus on the yield at 3.5% being a good yield for a dividend paying stock.
There is a recent article about this stock in New Technology Magazine. If you like timing the market, there is a blog entry about this stock being bullish.

When I look at analysts’ recommendations, I find recommendations of Strong Buy, Buy, Hold and Sell. There is no Underperform rating and there is only one Sell. The consensus recommendation would be a Hold. (See my site for information on analyst ratings.) I see no negative comments on this company. Even those analysts that feel now is not the time to buy, say it is a well run company. Others think that it will pick up with the oil and gas industry, and that this has started to happen. They also point to the strong balance sheet of this company.

Mullen Group Ltd. is a corporation that owns a network of independently operated businesses. Mullen is recognized as the largest provider of specialized transportation and related services to the oil and natural gas industry in Western Canada and is one of the leading suppliers of trucking and logistics services in Canada - two sectors of the economy in which Mullen has strong business relationships and industry leadership. Its web site is here Mullen. See my spreadsheet at mtl.htm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.