Mullen Group Ltd.

On my other blog I am today writing about Dividend Yields continue...

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 dividends again.

When they became a corporation 2009, dividends dropped some 72%. Since 2011 they have been raising again. The dividend increases over the past 5 and 10 years are at a negative 5.6% and positive 26%. However, if you look at dividend increases over the past 4 years, dividends are up by 24.5%.

They have recently changed from paying quarterly dividends to again paying monthly dividends. Because of the timing of the dividends it appears that dividends went up 35% in 2013 and down 11% in 2014. However, the dividend increased by 20% in 2013. So far there has been no dividend increases in 2014.

The reason for the original decrease in dividends was to have proper Dividend Payout Ratios. The 5 year median DPR for EPS is at 61% and for CFPS is at 33%. The ones for 2013 were higher at 86% for EPS and 54% for CFPS. They are expected to be at 100% and 47% respectively in 2014 and then dropping to 83% and 41% in 2015.

Shareholders have done well with the 5 and 10 years total return at 10.65% and 8.90% per year. The portion of this total return attributable to dividends is at 5.25% and 6.40% per year. The portion of this total return attributable to capital gain is at 5.40% and 2.50% per year.

Outstanding Shares have increased by 2.4% and 7.3% 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. Because of the increase in outstanding shares, if I were a shareholder I would be interested in per shares.

Revenues over the past 5 years have had no to little growth, but there has been moderate to good growth over the past 10 years. The 5 year running averages show moderate growth. There can problems with looking at exact 5 and 10 years growth figures as they may not tell the whole story.

Earnings per Share show the same sort of pattern with little growth over the past 5 years and moderate growth over the past 10 years. However, if you look at 5 year running averages, the 5 and 10 years growth is good.

The growth in cash flow is a bit different. The has been moderate to good growth in cash flow, but for the cash flow per share there is no growth over the past 5 years for 5 years exact figures and 5 year running averages. There is moderate to good growth looking at cash flow and cash flow per share and also at 5 year running averages for cash flow per share for the past 10 years.

Revenue has grown at 1.8% and 13% per year over the past 5 and 10 years. The Revenue per Share is down by 0.6% per year over the past 5 years, but up by 5.3% per year over the past 10 years. If you look at 5 year running averages, Revenue per Share is up by 6.8% and 3.4% per year over the past 5 and 10 years.

The EPS is up by 2.3% and 7.8% per year over the past 5 and 10 years. If you look at 5 year running averages EPS is up by 8.7% and 8.4% per year over these periods.

Cash flow is down by 1.9% and up by 15.7% per year over the past 5 and 10 years. CFPS is down by 4.1% and up by 7.8% over the past 5 and 10 years. If you look at CFPS and 5 year running averages, the cash flow is up by 0.7% and 10.1% per year over the past 5 and 10 years.

The Return on Equity was been below 10% 4 times in the past 10 years and 2 times in the past 5 years. The ROE for 2013 is quite good at 15.9% and it has a 5 year median value of 15.8%. There is no difference between the net income and the comprehensive income and this suggests that the net income is of good quality.

On good thing to remark on for this stock are the very good debt ratios. This company is a service company to the oil and gas industry and good debt ratios help companies survive the bad times. The Liquidity Ratio is 2.79 and the 5 year median is 2.65. The Debt Ratio is 2.31 and the 5 year median is also at 2.31. The Leverage and Debt/Equity Ratios are 1.76 and 0.76 and the 5 year median values are 1.65 and 0.65, respectively.

Sound bit for Twitter and StockTwits is: Oil and Gas Service, Dividend Growth Company. If you do not want to invest in the oil and gas companies, a service company might be worth your while. It gives you some exposure and these sorts of company might be safer bets. See my spreadsheet at mtl.htm.

This is the first of two parts. The second part will be posted on Thursday, December 18, 2014 and will be available here. The first part talks about the stock and the second part talks about the stock price.

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 Group.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.