TSX:MTL

Stock Analysis Report

Executive Summary

Mullen Group Ltd. provides transportation and oilfield services in Canada and the United States.

Rewards

Trading at 42.5% below its fair value

Became profitable this year

Risk Analysis

Earnings are forecast to decline by an average of -13.9% per year for the next 3 years

Has a high level of debt

Dividend of 6.56% is not well covered by earnings



Snowflake Analysis

Undervalued with adequate balance sheet.


Similar Companies

Share Price & News

How has Mullen Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: MTL has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.6%

MTL

-1.3%

CA Transportation

0.2%

CA Market


1 Year Return

-25.4%

MTL

16.0%

CA Transportation

4.9%

CA Market

Return vs Industry: MTL underperformed the Canadian Transportation industry which returned 16% over the past year.

Return vs Market: MTL underperformed the Canadian Market which returned 4.9% over the past year.


Shareholder returns

MTLIndustryMarket
7 Day-2.6%-1.3%0.2%
30 Day-4.1%0.1%0.4%
90 Day11.0%6.1%3.7%
1 Year-20.6%-25.4%17.9%16.0%8.2%4.9%
3 Year-38.8%-46.2%48.9%41.9%15.9%5.5%
5 Year-44.2%-55.3%54.9%43.3%33.8%14.3%

Price Volatility Vs. Market

How volatile is Mullen Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Mullen Group undervalued compared to its fair value and its price relative to the market?

42.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: MTL (CA$9.15) is trading below our estimate of fair value (CA$15.91)

Significantly Below Fair Value: MTL is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: MTL is good value based on its PE Ratio (13.3x) compared to the Transportation industry average (20.3x).

PE vs Market: MTL is good value based on its PE Ratio (13.3x) compared to the Canadian market (16x).


Price to Earnings Growth Ratio

PEG Ratio: MTL's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: MTL is good value based on its PB Ratio (1x) compared to the CA Transportation industry average (2.6x).


Next Steps

Future Growth

How is Mullen Group forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

-13.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MTL's earnings are forecast to decline over the next 3 years (-13.9% per year).

Earnings vs Market: MTL's earnings are forecast to decline over the next 3 years (-13.9% per year).

High Growth Earnings: MTL's earnings are forecast to decline over the next 3 years.

Revenue vs Market: MTL's revenue (4.7% per year) is forecast to grow slower than the Canadian market (4.9% per year).

High Growth Revenue: MTL's revenue (4.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MTL's Return on Equity is forecast to be low in 3 years time (6.9%).


Next Steps

Past Performance

How has Mullen Group performed over the past 5 years?

-23.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MTL has high quality earnings.

Growing Profit Margin: MTL became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: MTL's earnings have declined by -23.2% per year over the past 5 years.

Accelerating Growth: MTL has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: MTL has become profitable in the last year, making it difficult to compare its past year earnings growth to the Transportation industry (-2.6%).


Return on Equity

High ROE: MTL's Return on Equity (7.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Mullen Group's financial position?


Financial Position Analysis

Short Term Liabilities: MTL's short term assets (CA$349.3M) exceed its short term liabilities (CA$106.0M).

Long Term Liabilities: MTL's short term assets (CA$349.3M) do not cover its long term liabilities (CA$725.3M).


Debt to Equity History and Analysis

Debt Level: MTL's debt to equity ratio (62.8%) is considered high.

Reducing Debt: MTL's debt to equity ratio has reduced from 78.3% to 62.8% over the past 5 years.

Debt Coverage: MTL's debt is well covered by operating cash flow (29.6%).

Interest Coverage: MTL's interest payments on its debt are well covered by EBIT (3.8x coverage).


Balance Sheet

Inventory Level: MTL has a high level of physical assets or inventory.

Debt Coverage by Assets: MTL's debt is not covered by short term assets (assets are 0.6x debt).


Next Steps

Dividend

What is Mullen Group's current dividend yield, its reliability and sustainability?

6.56%

Current Dividend Yield


Dividend Yield vs Market

company6.6%marketbottom25%1.9%markettop25%5.3%industryaverage1.6%forecastin3Years6.6%

Current dividend yield vs market & industry

Notable Dividend: MTL's dividend (6.56%) is higher than the bottom 25% of dividend payers in the Canadian market (1.89%).

High Dividend: MTL's dividend (6.56%) is in the top 25% of dividend payers in the Canadian market (5.31%)


Stability and Growth of Payments

Stable Dividend: MTL's dividend payments have been volatile in the past 10 years.

Growing Dividend: MTL's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (87.1%), MTL's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: MTL's dividends in 3 years are not forecast to be well covered by earnings (90.9% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

10.1yrs

Average board tenure


CEO

Murray Mullen (63yo)

CA$570,000

Compensation

Mr. Murray K. Mullen serves as the President of Mullen Trucking Corp. Mr. Mullen has been the Chief Executive Officer and President of Mullen Group Ltd. (Formerly, Mullen Group Income Fund, Mullen Transpor ...


Board Members

NamePositionTenureCompensationOwnership
Murray Mullen
Chairman0yrsCA$570.00k4.62% CA$44.3m
David Mullen
Non Independent Director10.1yrsCA$49.80kno data
Stephen Lockwood
Independent Director15.1yrsCA$49.80k0.38% CA$3.6m
Greg Bay
Independent Director15.1yrsCA$70.30k0.045% CA$430.0k
Christine McGinley
Independent Director2.8yrsCA$63.20k0.014% CA$131.6k
Philip Scherman
Independent Director5.3yrsCA$74.80k0.031% CA$300.1k
Sonia Tibbatts
Lead Independent Director0.8yrsCA$63.20k0.016% CA$149.6k

10.1yrs

Average Tenure

63yo

Average Age

Experienced Board: MTL's board of directors are seasoned and experienced ( 10.1 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: MTL insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Mullen Group Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Mullen Group Ltd.
  • Ticker: MTL
  • Exchange: TSX
  • Founded: 1949
  • Industry: Trucking
  • Sector: Transportation
  • Market Cap: CA$959.149m
  • Shares outstanding: 104.82m
  • Website: https://www.mullen-group.com

Number of Employees


Location

  • Mullen Group Ltd.
  • Chimney Rock Centre
  • 121A, 31 Southridge Drive
  • Okotoks
  • Alberta
  • T1S 2N3
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MTLTSX (The Toronto Stock Exchange)YesNew Common SharesCACADDec 1993
9MUDB (Deutsche Boerse AG)YesNew Common SharesDEEURDec 1993
MLLG.FOTCPK (Pink Sheets LLC)YesNew Common SharesUSUSDDec 1993

Biography

Mullen Group Ltd. provides transportation and oilfield services in Canada and the United States. It operates in two segments, Trucking/Logistics and Oilfield Services. The Trucking/Logistics segment transports general freight; cables, and pipe and steel products; and dry bulk commodities comprising cement and frac sand, as well as over-dimensional loads, such as heavy equipment, compressors and over-sized goods. This segment also offers various services, including logistics, warehousing and distribution, transload, and intermodal services; and production, excavation, and transportation of various aggregate products. The Oilfield Services segment provides well-servicing, specialized transportation, dewatering, and drilling services to the oil and natural gas industry. Its services include transporting of oversize and overweight shipments; transportation, handling, storage, and computerized inventory management of oilfield fluids, tubulars, and drilling mud; stockpiling and stringing of large diameter pipes; and a range of services related to the processing and production of heavy oil, including well servicing and handling, transportation of fluids, and processing and disposal of oilfield waste, as well as frac support, dredging, water management, dewatering, pond reclamation, hydrovac excavation, drilling rig relocation, core drilling, casing setting, and conductor pipe setting services. Mullen Group Ltd. was founded in 1949 and is based in Okotoks, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/19 00:49
End of Day Share Price2020/02/18 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.