A logistic firm and a provider of specialty chemicals to major industrial markets are moneymakers for stock investors. The two TSX stocks aren’t flashy, but given their attractive dividend yields and monthly payouts, you can transform your capital into a $250 monthly income.
Best opportunity for growth
Mullen Group (TSX: MTL) started as a gravel hauler in 1950 before making a name in North America’s trucking industry. Today, the $1.37 billion logistics and warehousing company has defined strategies to sustain long-term viability and insurance against volatility.
Four operating segments (38 business units) combine to deliver solid margins, cash flow, and dividends. Its Less-Than-Truckload segment, the largest final mile network in western Canada and Ontario, extends into the United States. The Logistics & Warehouse segment provides transportation and logistics solutions.
The Specialized & Industrial segment caters to and services Canada’s natural resources and infrastructure sectors. Its U.S. & International Logistics segment, through a proprietary integrated transportation management platform, is a third-party logistic (3PL) provider. The 3PL industry in the U.S. is worth US$1.6 billion.
According to its chairman and senior executive officer Murray K. Mullen, the “decentralized” business model is a competitive advantage. Mullen operates through wholly-owned companies and limited partnerships. Because the logistics companies are involved in different sectors, Mullen has the best opportunity for growth.
In the first half of 2023, total revenue increased 1.4% to $992.1 million versus the same period in 2022, while net income rose 15.4% year over year to $68.2 million. The firm will spend $70 million this year for maintenance capital, primarily to purchase trucks, trailers, specialized equipment, and technology to improve operations further.
Also, the opening of its new cross-dock facility (36,000 square feet) in Kamloops, B.C., in the second quarter (Q2) of 2023 expands Mullen’s less-than-truckload operating network. Management expects North America’s economy to hold steady and remain resilient. Moreover, freight and logistics demand should stay firm while the stock market adjusts to higher interest rates. If you invest today, Mullen pays a 4.67% dividend.
Thriving chemicals business
Chemtrade Logistics Income Fund (TSX: CHE.UN) thrives in 2023 amid the inflationary environment. The $1.02 billion company provides industrial chemicals and services in North America and internationally. Its two core business segments, Sulphur & Water Chemicals (SWC) and Electrochemicals (EC), are the bread and butter.
In Q1 2023, revenue and cash flows from operating activities jumped 20.7% and 46.4% year over year to $471.24 million and $54.37 million, respectively. Notably, net earnings soared 644.3% to $79.53 million versus Q1 2022. Furthermore, long-term debt declined 37.5% to $327.78 million from a year ago.
Chemtrade reached the highest annual adjusted earnings before interest, taxes, depreciation, and amortization ($430.9 million) in 2022 and expects the figure to be at par or above in 2023. Its new business drivers include expansion projects in Allen County, Ohio, and Casa Grande, Arizona. Today, you can partake in the mouth-watering 6.82% dividend.
Suggested allocation
The table below shows how many shares of Mullen and Chemtrade you need to own or accumulate to generate $250 in monthly passive income. All computations are based on the current stock price and dividend yields.
| Company | Price | No. of Shares | Dividend Per Share (Annual) | Total Payout (Annual) | Frequency |
| Mullen | $15.43 | 2,230 | $0.72 | $1,606.90 | Monthly |
| Chemtrade | $8.80 | 2,325 | $0.60 | $1,395.37 | Monthly |
The total investment amount is $54,868.90, where $34,408.90 is for Mullen and $20,460.00 is the allocation for Chemtrade. Add the total payouts and divide them by 12 to get $250.19 monthly. Remember, you don’t need to make a significant upfront investment. Start small and then buy more shares until you can produce the desired income.
