Mullen Group Ltd.: The Dividend Machine with Legs for Income Investors

Income investors, take note: Mullen Group Ltd. (TSX:MTL) is a dividend powerhouse that's not just surviving but thriving in today's market. With a payout ratio that's been kept in check and a track record of consistent increases, this transportation and logistics giant is a buy-and-hold candidate for those seeking steady income and growth. Let's dive into why this stock is a must-own.

A Dividend History Built on Steadfastness

Mullen has been a dividend stalwart since 2020, weathering economic storms and emerging stronger. After briefly suspending payouts in early 2020, the company resumed dividends at CA$0.03 per share monthly by July 2020 and has since increased them to the current CA$0.06 per share monthly—a 100% rise over five years. .

The magic isn't just in the growth but in the sustainability. Analysts highlight a trailing payout ratio of 65%—comfortably below the 2014 peak of 194%—as a sign of financial discipline. Even after Q1 2025's EPS miss (down 20% year-over-year), the dividend remained untouched, backed by $39.9 million in operating cash flow and a fortress-like balance sheet ($131.2M cash, $525M borrowing capacity).

Why the Dividend Won't Stall

1. Cash Flow Engine: Despite the Q1 earnings dip, Mullen's operating cash flow grew 3.4% year-over-year to $0.46 per share, ensuring dividends are well-covered.
2. Strategic Acquisitions: The Cole Group buy and U.S. 3PL expansion are fueling top-line growth. Acquisitions added $37.7M in incremental revenue in Q1 2025 alone.
3. Debt Under Control: Net debt-to-operating cash flow ratios of 2.23:1 (below a 3.50:1 covenant threshold) mean no near-term defaults.

A Yield That Competes with the Best

At a 5.98% dividend yield (as of May 2025), Mullen trounces the Canadian market's bottom 25% (2.0%) and even edges closer to the top quartile (6.0%). This isn't a flash-in-the-pan payout; it's a structured policy that's grown at a 29.7% annual clip since 2021.

Risks? Yes. But Manageable.

• Earnings Volatility: Q1's miss was a hiccup, not a trend. The company has consistently rebounded—third-quarter 2024 earnings beat estimates, and long-term growth drivers are intact.
• Tariff Headwinds: U.S. trade tensions? Mullen's diversification (international logistics, robotics projects) cushions against single-market risks.

The Bottom Line: Buy Now, Collect Later

Mullen Group isn't just a dividend stock—it's a compounder. With a yield nearing 6%, a fortress balance sheet, and growth levers like acquisitions firing on all cylinders, this is a rare blend of safety and upside.

Action Item: Dip your toes in at current levels. If you're chasing income without sacrificing growth, Mullen is your ticket. This dividend machine isn't slowing down—it's just getting started.

Don't let this one slip away. The income train is leaving the station—jump aboard.