Is it a good company at a reasonable price? The stock price is reasonable and it may even be cheap. I have this in my main Trading Account, but it is a small cap that is volatile. You should only buy such stocks if you can put up with the volatility. This stock has a dividend and it shows why it is a good idea to buy stocks with dividends. You often do not lose on them when you consider the stock value and the dividends you have received.
I own this stock of Mullen Group Ltd (TSX-MTL, OTC-MLLGF). I intend to hold on to the shares I have. This stock made a high at 2014 that it has never repeated. Currently it is 50% below the high. It has a BETA of 1.76, so it is more volatile than the general market. It provides serves to the resource industrial in Western Canada. Resource industrials in Western Canada are boom and bust type industries.
When I was updating my spreadsheet, I noticed this stock hit a high in mid-2014, and has yet to match it again. This stock today is 52% below that high. My total return to the end of April 2023 is 0.59% with a capital loss of 2.79% per year and dividends of 3.38% per year. It is better than last year when I had a total loss of 2.97% per year. I never bought at the top price and when there was a low in 2021, I bought some more shares.
If you had invested in this company in December 2012, for $1,003.20 you would have bought 48 shares at $20.60 per share. In December 2022, after 10 years you would have received $355.20 in dividends. The stock would be worth $698.40. Your total return would have been $1,053.60. This would be a total return of 0.61% per year with 3.56% from capital loss and 4.16% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $20.90 | $1,003.20 | 48 | 10 | $355.20 | $698.40 | $1,053.60 |
The current dividend yield is moderate with dividend growth moderate, but dividends are inconsistent. The current dividend yield is moderate (2% to 4% ranges) at 4.67%. The 5, 10 and historical dividend yields are also moderate at 4.46%, 4.61% and 4.13%. The dividends have increased at a moderate rate (8% to 14% ranges) at 13% per year over the past 5 years. Dividends have been inconsistent. Over the past 22 years, dividends have gone up 11 times and decreased 5 times.
The Dividend Payout Ratios (DPR) are fine, if a little high at some times. The DPR for EPS for 2022 is 41% with 5 year coverage at 81%. The DPR for Adjusted Earnings per Share (AEPS) for 2022 is 38% with 5 year coverage at 77%. The DPR for Cash Flow per Share (CFPS) for 2022 is 19% with 5 year coverage at 22%. The DPR for Free Cash Flow (FCF) for 2022 is 34% with 5 year coverage at 48%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 40.74% | 81.10% |
| AEPS | 37.50% | 77.42% |
| CFPS | 18.60% | 22.12% |
| FCF | 33.91% | 48.48% |
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio is good and low at 0.44. The Liquidity Ratio is good and high at 1.64. The Debt Ratio is good and high at 1.95. The Leverage and Debt/Equity Ratios are fine at 2.05 and 1.05.
| Type | Ratio |
|---|---|
| Lg Term | 0.44 |
| Liquidity | 1.64 |
| Liq. + CF | 2.55 |
| Debt Ratio | 1.95 |
| Leverage | 2.05 |
| D/E Ratio | 1.05 |
The Total Return per year is shown below for years of 5 to 25 to the end of 2022. 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 chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2017 | 5 | 12.89% | 1.92% | -1.56% | 3.48% |
| 2012 | 10 | -4.07% | 0.61% | -3.56% | 4.16% |
| 2007 | 15 | -6.47% | 3.90% | -1.26% | 5.16% |
| 2002 | 20 | 8.33% | 9.10% | 1.73% | 7.37% |
| 1997 | 25 | 7.54% | 9.28% | 2.97% | 6.31% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 6.81, 12.27 and 18.33. The corresponding 10 year ratios are 12.99, 15.97 and 18.95. The corresponding historical ratios are 11.38, 14.78 and 18.45. The current P/E Ratio 12.74 based on a stock price of $15.42 and EPS estimate for 2023 of $1.21. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 13.60, 16.58 and 19.56. The corresponding 10 year ratios are 14.87, 1976 and 24.74. The current P/AEPS Ratio is 12.34 based on a stock price of $15.42 and AEPS estimate for 2023 of $1.25. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $16.85. The 10-year low, median, and high median Price/Graham Price Ratios are 1.06, 1.32 and 1.56. The current P/GP Ratio is 0.92 based on a stock price of $15.42. The current ratio is below the low ratio of the 10 year median ratio. 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 1.72. The current P/B Ratio is 1.53 based on a Book Value of $938.4M, Book Value per Share of $10.10 and a stock price of $15.42. The current ratio is 11% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I also have a Book Value per Share estimate for 2023 of $10.70. This implies a Book Value of $994.6M with a P/B Ratio of 1.44 and a stock price of $15.42. This ratio is 16% below the 10 year median ratio of 1.72. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10-year median Price/Cash Flow per Share Ratio of 6.02. The current P/CF Ratio is 5.71 based on Cash Flow per Share estimate for 2023 of $2.70, Cash Flow of $251M and a stock price of $15.42. The current ratio is 5% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get an historical median dividend yield of 4.13%. The current dividend yield is 4.67% based on a dividend of $0.72 and a stock price of $15.42. The current ratio is 13% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10 year median dividend yield of 4.61%. The current dividend yield is 4.67% based on a dividend of $0.72 and a stock price of $15.42. The current ratio is 1.4% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.
The 10-year median Price/Sales (Revenue) Ratio is 1.27. The current P/S Ratio is 0.72 based on Revenue estimate for 2023 of $1,992M, Revenue per Share of $21.43 and a stock price of $15.42. The current ratio is 43% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
Results of stock price testing is that the stock price is probably reasonable. The dividend yield tests are saying this. The P/S Ratio test is saying the stock price is cheap and it maybe. All the rest of the testing is showing the stock price either as cheap or reasonable.
When I look at analysts’ recommendations, I find Strong Buy (1), Buy (4) and Hold (5). The consensus would be a Buy. The 12 month stock price consensus is $16.68. This implies a total return of 12.84% with 8.17% from capital gains and 4.67% from dividends.
Analysts left a couple of positive remarks on this company in 2023 on Stock Chase . Stock Chase gives this company 4 stars out of 5. It is 71 on the Money Sense list. Ambrose O'Callaghan on Motley Fool says it is a cheap dividend stock to own. Jitendra Parashar on Motley Fool likes this stock for its monthly dividends. The company put out a press release on Newswire about their 2022 results. The company put out a press release on Newswire about their results for the first quarter of 2023. Simply Wall Street gives this stock 3 stars out of 5.
Simply Wall Street via Yahoo Finance reviews this stock . Simply Wall Street gives out 3 warnings of earnings are forecast to decline by an average of 11% per year for the next 3 years; has a high level of debt; unstable dividend track record. They are right this time about unstable dividends.
Mullen Group Ltd is a logistics provider with a network of independently operated businesses providing a wide range of service offerings including less-than-truckload, truckload, Specialized & Industrial Services warehousing and logistics, U..S. and International Logistics, and Corporate. The company also provides a diverse set of specialized services related to the energy, mining, forestry, and construction industries in western Canada. 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 Canadian Utilities Ltd (TSX-CU, OTC-CDUAF) ... learn more on Wednesday, May 24, 2023 around 5 pm. Tomorrow on my other blog I will write about Passive Canadian Income.... learn more on Tuesday, May 23, 2023 around 5 pm.
I started this blog on May 21, 2008, so it has been some 15 years that I have been doing this.
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 site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
No comments:
Post a Comment