MTS delivered a mixed result in late June, which has seen the stock trade down towards fresh 3-year lows. The bright spot was a dividend of 8.5 cents for the half, which took the full-year dividend to 19.5 cents, putting the stock on a fully franked yield of around 5.5%. Hardware is the most cyclical MTS division. The construction backdrop remains challenging, with the market weak on all levels, from new housing to renovations. However, as we saw with resources stocks this week, buying cyclical stocks into weakness can pay dividends—it’s a simple matter of when and where! A drop to fresh 2024 lows wouldn’t surprise, but we believe value will be attractive into such a move.
- We like the risk/reward and dividend towards MTS around $3.50 – MM is already long MTS in our Active Income Portfolio.
NB MTS is in our Active Growth Portfolios Hitlist.
MM is bullish towards MTS around $3.50
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