When investors look up a stock, much of the time, we’ll see how the stock has performed in the last year. That can be quite misleading if you don’t scratch that surface just a little bit. While a share price can be down yearly, it could also be up significantly over the last few months. That’s exactly what might be happening to investors looking at Mullen Group (TSX:MTL). Shares are down 5.6% in the last year at writing, yet since April, the dividend stock has seen its price rise 24%! So, let’s look at why this dividend stock is still a buy as it continues to recover.
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About MTL
Mullen Group is one of Canada’s larger diversified logistics and transportation companies. It doesn’t just haul freight, but holds multiple business lines, including less-than-truckload (LTL), full truckload, warehousing and third-party logistics (3PL), and specialized and industrial transportation services. The dividend stock also serves resource, construction, mining, and environmental sectors through specialized hauling, fluid hauling, and industrial services in western Canada. This gives it exposure beyond general freight.
Over the years, the dividend stock has grown both organically and through acquisitions. It’s expanded its footprint, diversified its revenue base, and built a wide network of independent operating businesses under the Mullen umbrella. Crucially for income investors, Mullen Group pays out a monthly dividend, coming out annually at $0.84 rather than quarterly.
Into earnings
In 2025, Mullen Group will continue executing its growth strategy, with acquisitions a key driver. For example, the dividend stock closed a new acquisition with The Cole Group to broaden its service offerings and geographic reach. Furthermore, the “less-than-truckload” segment saw growth, and revenue from existing business units (excluding acquisitions and fuel surcharges) increased modestly. Meanwhile, the dividend stock affirmed its commitment to its dividend and listed a 2025 business plan that maintains shareholder payouts while investing in capital expenditures and growth.
That said, Mullen has faced headwinds in certain segments. Some specialized and industrial services related to resource sectors saw softer demand, which dragged segment-level earnings. This is a likely contributor to pressures on the share price. Nonetheless, the diversified nature of Mullen’s businesses helps smooth out cyclical weakness in any one part of its operations.
A great rebound play
Now could be the best time to get in on this dividend stock while it rebounds. Mullen Group currently offers a dividend yield of 5.7% at writing. That makes it attractive as a cash-flow stock, especially for investors seeking regular income. Plus, Mullen isn’t dependent on just one type of freight or sector. Because it offers trucking, warehousing, specialized hauling, industrial services, and 3PL, its business is diversified. That diversification helps the dividend stock weather cyclical slowdowns in one sector while others hold up.
Furthermore, the recent push to acquire complementary businesses like The Cole Group shows management is actively building scale and broadening service offerings. Over time, as those acquisitions get integrated and synergies realized, the potential exists for stronger cash flow, improved margins, and a more resilient base to support dividends and long-term returns.
Foolish takeaway
That said, Mullen isn’t without risk. Its business remains somewhat cyclical as demand for hauling, industrial services, and resource-sector work can ebb and flow. Softness in one business segment can drag results temporarily. Also, acquisitions must be well-integrated, so overpaying or failing to manage costs could pressure margins.
Yet right now, the dividend stock has fallen significantly, and that may already be largely priced in. For a patient investor with a long horizon, that means you may be buying a diversified, dividend-paying company at a discount with the potential for both income and capital appreciation over time. In fact, here’s what $7,000 could bring on the TSX today.
Overall, for those willing to accept some volatility and ride out sector cycles, MTL could serve as a reliable component of a passive-income portfolio.
