Long Term View: Methven Ltd

In this series of posts I am going to be looking at stocks listed on the NZX in relation to their returns to shareholders over the life of their listing -what shareholders would now see in their back pockets if they had invested in the company IPO. The calculation of returns includes dividends and tax credits.

Methven Ltd [MVN.NZ] has been a poorly performing stock since its November 2004 IPO and listing (see Methven Prospectus for details) at $1.43. MVN shareholders have not done well. With 60c in net dividends and 30% more in tax credits (see chart above) gives MVN a 80% return (see chart below for the share price percentage gain against the average of all NZX indexes - does not include dividends, tax credits and the share split in its calculation) and over the nearly 6 year listing of MVN an approximate annual net return of 13.3%.

This is approximately a 80% better return when compared to the average of all NZX indexes.





Long Term View Series

Auckland International Airport
Air New Zealand
AMP Ltd
Briscoe Group Ltd
Cavalier Corporation Ltd
Contact Energy Ltd
Delegats Group Ltd
EBOS Group Ltd
Fletcher Building Ltd
Fisher & Paykel Appliances
Fisher & Paykel Healthcare
Freightways Ltd
Goodman Fielder Ltd
Hallenstein Glasson Holdings Ltd
Hellaby Holdings Ltd
Kirkcaldie & Stains Ltd
Kiwi Income Property Trust Ltd
Mainfreight Ltd
Michael Hill International Ltd
Metlifecare Ltd
New Zealand Refining Ltd
New Zealand Stock Exchange Ltd
Nuplex Industries Ltd
Port Of Tauranga Ltd
Postie Plus Group Ltd
Pumpkin Patch Ltd
Restaurant Brands Ltd
Ryman Healthcare Ltd
Sanford Ltd
Sky City Entertainment Group Ltd
Sky Network Television Ltd
Steel & Tube Ltd
Telecom NZ Ltd
Telstra Corp Ltd
Tourism Holdings Ltd
The Warehouse Group Ltd


Methven Ltd @ Share Investor

Stock of the Week: Methven Ltd
Discuss MVN @ Share Investor Forum
Download MVN Company Reports

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Stock of the Week: Methven Ltd

This edition of Stock of the Week focuses on little known company (unless of course if you are already a shareholder) Methven Ltd [MVN.NZ].

Methven is an up and coming star in the bathroom products/kitchenware area as far as delivering water to the consumer via their various faucet related products (it has been around for for 125 years) and it has recently had an overriding push to market high end to higher quality mass market products, rather than high volume lower quality mass market garbage from China or elsewhere and that is the main reason why I chose this stock.

Management are clearly on the ball too with their emphasis on the quality end of the mass market where higher margins are made, with a good niche to carve out, especially for a smaller Kiwi player that simply cannot compete on scale.

They haven't done spectacularly well over the last 12 months because of the building downturn, but with aspirations to become a global brand and the willingness to apply money to research new and innovative products, as well as pursuing growth by careful acquisitions Methven should be able to achieve their goals.

Growth will return once we start building again and in the meantime the company is focused on trimming unnecessary costs, to alleviate the temporary dip in profit.

As you can see from the chart above the share price has plumbed the depths to around 65c 4-5 months ago but that is off a 52 week high of NZ$1.74 and an all-time high of $2.80 near the end of 2008.

The dividend yield of just over 12% gross is also a very attractive feature of this stock and apparently will still look quite handsome even with the small profit drop.

Buy on weakness, there should be some stock price drops as the year plods on with the lower profit forecast.

Good luck!


Stock of the Week Series

Metlifecare Ltd
Auckland International Airport
Sky City Entertainment Group
Burger Fuel Worldwide
Michael Hill International
Contact Energy Ltd
The Warehouse Group
Fisher & Paykel Appliances


Methven Ltd @ Share Investor

Long Term View: Methven Ltd
Stock of the Week: Methven Ltd

Discuss MVN @ Share Investor Forum
Download MVN Company Reports


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