We all know how rare it is to find a stock that keeps paying you even when the economy hits rough patches. That’s what makes monthly dividend stocks so attractive, especially for income-focused investors with a long-term approach. You can count on that income whether the market is hot or not.
That’s exactly what Mullen Group (TSX:MTL) offers right now. The company has been busy building out its logistics business, making strategic acquisitions, and reinforcing its capital structure, all while keeping that 6.1% yield flowing to investors, with monthly payouts.
In this article, I’ll highlight how Mullen is doing this and why it’s a top pick for monthly income seekers today.
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A logistics stock with dependable monthly income
Mullen Group is one of the largest logistics firms in Canada, operating across less-than-truckload (LTL), logistics and warehousing, U.S. and international freight, and specialized industrial services.
Lately, Mullen’s stock has been on a bit of a bumpy ride. After sliding by nearly 8% in the last six months, the stock currently trades at $13.73 per share with a market cap of $1.2 billion. At this market price, it offers an attractive 6.1% annualized dividend yield – paid out every month. That’s right, it’s a top monthly dividend stock delivering stable income even when the economy isn’t in top shape.
Navigating a challenging environment
Now, let’s look at what’s behind that recent dip in MTL stock and what’s keeping its business solid despite it. It’s true that Mullen has been operating in a tough freight environment. Currently, pricing power is weak across the industry, and there’s still more supply than demand.
Yet, the company has stayed active on the acquisition front. It closed the acquisition of Cole Group in June and completed a successful oversubscribed bond issue, which strengthens its financial position well into the next decade.
Mullen’s recent acquisitions helped its revenue climb 9.1% YoY (year-over-year) to $540.9 million in the second quarter. However, the company’s profitability side took a hit, with its adjusted operating profit before depreciation and amortization declining 2.1% YoY to $83.8 million, and adjusted net profit falling 43.6% YoY to $18.5 million. Still, Mullen held up better than expected, considering the pricing pressure and rising costs across the board.
Focus on long-term growth beyond cycles
Interestingly, Mullen is not just sitting still waiting for the market to bounce back. In fact, it has been acquiring strong, complementary businesses to strengthen its network further, while also repaying upcoming debts early. This proactive approach is what gives long-term investors confidence as it could help keep its cash flows remain stable through various economic cycles.
We know the freight market won’t stay imbalanced forever. When it eventually resets, Mullen is planning to shift from not only protecting margins but improving them. This forward thinking is what separates Mullen from many of its industry peers.
Clearly, by maintaining a stable dividend while reinvesting strategically in long-term growth, the company is building a more durable base for future profitability. And for anyone relying on monthly income, that reliability matters.
