MTY's profit soars to $23M in Q2. A consumer stock to buy?

Summary

  • MTY Food Group operates over 80 restaurant brands, including famous quick service food outlets like Thai Express.
  • MTY will start paying a dividend again to the shareholders and it will be payable on August 13, 2021.
  • MTY stock returned 75 per cent to the shareholders in the last twelve months

Stocks of MTY Food Group Inc. (TSX:MTY), an operator of restaurant chains, jumped nearly 18 per cent (11.14AM EST) on Friday, July 9, on the back on its latest earnings report.

The company reported a net income of C$ 23 million for Q2 2021, which was significantly up against a net loss of C$ 99.1 million in Q2 2020.

During the peak of the pandemic last year, the restaurant franchisor had suspended its dividend amid its halted operations. In the wake of its positive second quarter results this year, the company has announced that it will restart paying dividends to its shareholders.

In its official statement, MTY Food Group said that it has decided to pay a quarterly dividend of C$ 0.185 to its shareholders, which will be payable on August 13, 2021.

MTY Food Group (TSX:MTY)

MTY Food Group operates over 80 restaurant brands, including famous quick service food outlets like Thai Express and Tiki-Ming.

In its latest earnings report, the company revealed that at the end of the second quarter, some 359 of its outlets remained temporarily closed due to the pandemic. As of July 9, that number has shrunk to 258.

More of its outlets are likely to reopen going forward as the public health restrictions are relaxed.

In the last twelve months, MTY share returned about 75 per cent to surpass the Toronto Stock Exchange 300 Composite Index's growth of 36 per cent.

The stock also surged by 8.5 per cent year-to-date (YTD) and grew 13 per cent in the last week.


1-year chart of stock performance, moving average multiple and relative strength index of MTY Food Group (Source: Refinitiv)

MTY stock scored a 52-week high of C$ 62.91 on June 4, 2021. The stock might breach this mark during the trading session on Friday.

MTY Food Group recorded revenues of C$ 135.9 million in Q2 2021, up from C$ 97.8 million in Q2 2020. In the same period, its adjusted EBITDA increased to C$ 43.5 million, up from C$ 18.2 million in Q2 2020.

In Q2 2021, its cash flow from operations increased to C$ 29.5 million, while its free cash flows reduced to C$ 27.5 million.

The above constitutes a preliminary view and any interest in stocks should be evaluated further from investment point of view.

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