MIND CTI Ltd: Bullish Tech Stock Yielding 12.2%
November 15, 2024
MIND CTI Stock Up 18% Year Over Year
When it comes to technology stocks, reliable high-yield dividends generally don’t come to mind: Meta Platforms Inc (NASDAQ:META) pays 0.35%, Microsoft Corp (NASDAQ:MSFT) has a yield of 0.8%, Qualcomm Inc (NASDAQ:QCOM) pays 2.0%, and Texas Instruments Incorporated (NASDAQ:TXN) has a 2.6% yield.
But there’s one high-flying tech company with a bullish stock and ultra-high-yield dividend: MIND CTI Ltd (NASDAQ:MNDO).
MIND has been around for 24 years, but most people haven’t heard of the Israeli-based company. And maybe that’s because it’s a penny stock, and most investors don’t seem to trust stocks trading under $5.00. Especially those with high dividend yields. Because of the risk/reward trade-off with dividends, investors often associate high yields with crumbling share prices.
This isn’t the case with MIND CTI Ltd. It continues to report solid financial results, plus it has never missed a dividend payment. MNDO stock is up 18% over the last 12 months and its current dividend yield stands at 12.2%.
MIND CTI Ltd develops, markets, sells, and implements real-time and offline billing and customer care software solutions for communication service providers in the Americas, Europe, Israel, Asia-Pacific, and Africa.
The company offers its solutions to various types of communication providers, including traditional wireline and wireless, voice over Internet Protocol (VoIP), and broadband IP network operators, long-term evolution (LTE) operators, cable operators, and mobile virtual network operators (MVNOs).
“MINDBill” is the company’s billing and customer care solution for mobile telecommunication service providers. The system, which supports prepaid and postpaid payment methods, targets residential and business customers.
MIND’s “Message Mobil” allows businesses to communicate directly with their customers via instant messaging services, including “WhatsApp.”
“PhonEX ONE” is the company’s leading communication analyst and call accounting tool. The product provides in-depth analysis, reporting, traffic analysis, and fraud detection.
Each days, MIND’s customers conduct more than 100 million transactions. Some of its blue-chip customers include McDonald’s Corp (NYSE:MCD), Walt Disney Corp (NYSE:DIS), Coca-Cola Co (NYSE:KO), Intel Corp (NASDAQ:INTC), Chevron Corp (NYSE:CVX), and Unilever plc (NYSE:UL).
Second-Quarter Results
For the second quarter ended June 30, 2024, MIND CTI’s revenue was flat on an annual basis at $5.3 million, and down slightly from its $5.8 million in the first quarter. (Source: “Mind CTI Reports Second Quarter Results,” MIND CTI Ltd, August 6, 2024.)
The company’s operating income was $1.0 million, or 20% of total revenue, compared with $1.1 million, or $0.06 per share in the same prior year period. Net income was flat on an annual basis at $1.1 million, or $0.06 per share.
Cash flow from operating activities improved five percent to $2.0 million.
For the first half of 2024, MIND’s revenue inched up 2.8% to $11.0 million. Operating income was $2.3 million, or 20.9% of total revenue, compared with $2.4 million, or 22% of total revenue in the first half of 2023. Net income was flat at $2.5 million, or $0.12 per share.
Cash flow from activities increased 20.8% to $2.9 million, from $2.4 million in the first six months of 2023.
Commenting on the results, Monica Iancu, MIND CTI Ltd’s chief executive officer, said, “We have delivered some years of growth and encountered some difficult periods, including the present year, with multiple challenges to overcome. We have an incredibly strong billing platform, highly scalable analytic enterprise solutions, a flexible messaging platform and a strong team with proven successful execution.”
Annual Cash Distribution of $0.24/Share
Thanks to its reliable cash flow ($4.4 million in 2022, $4.04 in 2023), MIND CTI is able to provide investors with a reliable annual dividend. And I do mean annual, unlike most North American and European stocks, which often pay dividends on a monthly or quarterly basis, most Israeli firms pay a dividend once or twice a year.
Since MIND first implemented its annual dividend back in 2003, it has not missed a payment. The company typically declares its annual payment in March when it announces its fourth-quarter results. So, there’s more than enough time for investors to take a look at MIND before it declares its next annual dividend.
This past March, the company announced a gross dividend of $0.24 per share, for a current dividend yield of 12.24%. When MIND CTI Ltd paid the dividend on April 4, 2024, the dividend yield was 12.7%.
MNDO Stock Up 18% Year Over Year
While some impatient dividend hogs may not like having to wait a year to get their dividend payout, MIND CTI makes up for the long wait with solid underlying capital appreciation.
MNDO stock has done exceptionally well since the 2008/2009 financial crisis. Since the start of 2009, the stock has rallied an impressive 2,165%. Proof that not all penny stocks should be avoided.
More recently, over the past five years, with dividends reinvested, MNDO has returned total profits of 41%. Over the last two years, it has returned total profits of 19%. As of this writing (November 4), MNDO is up 12% year to date and 18% on an annual basis. Trading hands at $1.96, the stock is down slightly from its March 52-week high of $2.13 per share. Its all-time record high is $2.79, which it set in July 2021.
Chart courtesy of StockCharts.com
The Lowdown on MIND CTI Ltd
MIND CTI Ltd makes billing and customer care fun. MNDO is an under-the-radar tech stock that has been on a strong growth trajectory for the last number of years. The company has a strong balance sheet, consistent positive cash flows, a large international footprint, long-term relationships, and long-term contracts (providing it with recurring revenue), and it is home to a reliable, high-yield annual dividend.
