I 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 has converted from an income trust and has decreased it dividends.
When I was updating my spreadsheet, I noticed that the EPS loss in 2018 was caused by a goodwill impairment of $100M. This means that the EPS is not as depressed as it might seem to be.
The company cut dividends in 2009 when it converted from an income trust. The company started to raise dividends again in 2011, but probably raised them too much too soon. They had to cut dividends again in 2016. They raised them again in 2018. As you can see from the chart below, the dividend growth is a mixed record.
The Dividend Payout Ratios are fine. The DPR for 2018 cannot be calculated as the EPS for 2018 was negative. The 5 year coverage comes in very high at 209%. Analysts expect the DPR for EPS for 2019 to be around 107%. The DPR for CFPS for 2018 is better at 31% with 5 year coverage at 32%.
Debt Ratios are good. The Long Term Debt/Market Cap Ratios for 2018 is low and good at 0.38. The Liquidity Ratio for 2018 is good at 1.94. This ratio has always been good with a 5 year median at 2.13. The Debt Ratio is very good at 2.20 with 5 year median at 2.05. The Leverage and Debt/Equity Ratios are also very good at 1.83 and 0.83 respectively with 5 year medians at 1.86 and 0.86.
The Total Return per year is shown below for years of 5 to 21 to the end of 2018. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2013 | 5 | -15.55% | -11.81% | -15.53% | 3.72% |
| 2008 | 10 | -10.71% | 6.09% | -0.44% | 6.53% |
| 2003 | 15 | 10.30% | 7.18% | -0.50% | 7.69% |
| 1998 | 20 | 8.51% | 12.40% | 4.15% | 8.26% |
| 1997 | 21 | 9.34% | 2.68% | 6.66% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 23.17, 27.50 and 31.83. The corresponding 10 year ratios are 13.46, 15.78 and 18.10. The corresponding historical ratios are 12.04, 15.05 and 18.29. The current P/E Ratio is 17.84 based on a current stock price of $9.99 and 2019 EPS estimate of $0.56. This stock price testing suggests that the stock price is relatively reasonable, but above the median.
I get a Graham Price of $10.37. The 10 year low, median, and high median Price/Graham Price Ratios are 1.06, 1.30 and 1.54. The current P/GP Ratio is 0.96 based on a stock price of $9.99. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median Price/Book Value per Share Ratio of 1.93. The current P/B Ratio is 1.17 based on Book Value of $894.M, Book Value per Share of $8.53 and a stock price of $9.99. The current ratio is some 39% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get an historical median dividend yield of 3.99%. The current dividend yield is 6.01% based on dividends of $0.60 and a stock price of $9.99. The current yield is 51% above the historical one. This stock price testing suggests that the stock price is relatively cheap.
The 10 year median Price/Sales (Revenue) Ratio is 1.35. The current P/S Ratio is 0.80 based on 2019 Revenue estimate of $1,307M, Revenue per Share of $12.47 and a stock price of $9.99. The current Ratio is some 40% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
Results of stock price testing is showing up mostly as cheap. The only one that shows differently is the P/E Ratio test, but this is seldom a good test. The stock price has been hammered because it services the oil and gas industries. The stock price will move around but it will not substantially affect the results of the stock price testing over the short term.
When I look at analysts’ recommendations, I find Strong Buy (2), Buy (2), Hold (7) and Underperform (1). The consensus would be a Hold. The 12 month stock price consensus is $13.88. This implies a total return of 44.94%, with 38.94% from capital gains and 6.01% from dividends based on a current stock price of $9.99.
See what analysts are saying on Stock Chase. They like the company, but it has been pulled down with the oil down wave. Amy Legate-Wolfe on Motley Fool likes this stock. A writer on Simply Wall Street talks about ownership. A writer on Simply Wall Street talks about recent insider selling. Kevin Carmichael writes an interesting article on Calgary Herald about this company and its CEO, Murray Mullen.
Mullen Group Ltd supplies trucking and logistics services to the oil and natural gas industry in Canada and the United States. The company comprises two business segments: trucking/logistics and oilfield services. Product and service offerings include a range of truckload and less-than-truckload (relatively small freight) freight services. Its web site is here Mullen Group Ltd.
The last stock I wrote about was about was Hammond Power Solutions Inc (TSX-HPS.A, OTC-HMDPF) ... learn more. The next stock I will write about will be Pizza Pizza Royalty Corp (TSX-PZA, OTC-PZRIF) ... learn more on Tuesday, May 21, 2019 around 5 pm.
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The numbers look good, though I assume that they will go down for 2020, at least that's the case at https://www.cargolution.com/
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