Thursday, December 26, 2013

Mullen Group Ltd.

I am writing this entry in the afternoon of December 24, 2013. I still do not have any internet so I do not know when I might be able to post it.

I do not own this stock of Mullen Group Ltd. (TSX-MTL, OTC-MLLGF). I like to look at recommended small cap dividend paying stock to see if they would be a possible 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 reduction in dividend brought the Dividend Payout Ratios down to a place that would allow for the company to begin growing again.

The dividends are down by 11% per year over the past 5 years, but up by 22% per year over the past 10 years. When the company changed to a corporation, they changed from a monthly distribution to a quarterly distribution. In 2013, they changed the distribution of dividends back to a monthly distribution. The last dividend increase was for 20%.

Dividend increase for 2013 does not show up well in my spreadsheet because the quarterly dividend declared in December 2012 was paid in January 2013. For 2013 the company paid one quarterly dividend and 11 monthly dividends. From 2014 on the company will pay 12 monthly dividends.

Shareholders have done well with this stock. The stock is up some 35% this year. The 5 and 10 year total return to date is 21.70% and 13.68% per year. The capital gains portion of this return is 17.19% and 7.91% per year and the dividend portion is 4.51 and 5.77% per year. The dividend portion of total returns should decrease as they did decrease their dividends at conversion to a corporation.

The outstanding shares have grown at the rate of 1.7% per year and 7% per year over the past 5 and 10 years. Shares have increased due to Share Issues and Stock Options and have decreased due to Buy Backs. There has been fairly good growth in revenue, earnings and cash flow over the past 5 and 10 years for this company.

Revenue per Share is up by 3.3% and 9% per year over the past 5 and 10 years. However, if you look at 5 year running averages, the Revenue per Share is up by 10.6% and 8% per year over the past 5 and 10 years.

Earnings per Share are up by 14% per year over the past 10 years. I have no 5 year growth as 5 years ago the company has an earnings loss. If you look at the 5 year running averages, EPS is up by 11.8% and 7.5% per year over the past 5 and 10 years.

Cash Flow per Share is up by 3.3% and 14.5% per year over the past 5 and 10 years. If you look at the 5 year running averages, the growth is at 5.4% per year and 11.8% per year over the past 5 and 10 years.

The Return on Equity has generally, but not always been above 10%. The ROE for 2012 was 15.8% and the 5 year median ROE is 10.2%. The ROE on comprehensive income is also 15.8% for 2012.

The debt ratios, including Leverage and Debt/Equity Ratios are all quite good. The Liquidity Ratio is currently at 2.69 and the Debt Ratio is 2.31. This company has a strong Balance Sheet. The Leverage and Debt/Equity Ratios are also quite good at 1.76 and 0.76.

The current dividend at 4.26% with a 20% last dividend increase shows a company with a great dividend and great growth. This is a dividend growth stock. The company seems to be doing well. It has a strong balance sheet and this helps any company through recessionary periods. See my spreadsheet at mtl.htm.

This is the first of two parts. Second part will be posted on Friday, December27, 2013 and will be available here.

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.

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 or StockTwits.

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