We have delved into MTS a few times in 2024; it continues to be a stock we like and hold. Our more positive outlook on MTS is 3-fold.
- They trade on a more palatable 12.7x PE, which has been historically warranted, but we think there is an identifiable path for MTS to trade on a higher multiple over time.
- This should occur as the proportion of their business exposed to ‘growthier’ areas such as hardware, continues to increase, while recent acquisitions given them more scale.
- MTS yields a more attractive 5.96% fully franked, compensating us for our patience.
We would consider MTS for our Active Growth Portfolio if/when a higher level of ‘defence’ is required – MM is long MTS in our Active Income Portfolio.
MM is long and bullish MTS for income
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