MIND C.T.I. Ltd. (MNDO) designs, develops, and operates real-time and off-line convergent billing and customer care software solutions worldwide, explains low-priced stock expert Faris Sleem, editor of The Bowser Report.
Its products support various services, such as voice, data, and content services in a single platform. Its solutions also include a workflow engine to support the implementation of business processes and an integral point of sale solution that covers all sales processes.
MNDO is not your average small cap stock. It has strong fundamentals and pays an amazing dividend. The stock offers a dividend yield of 8%.
Typically, high dividend yields are accompanied by lackluster financial results and diminishing growth. However, MNDO recently announced that quarterly revenues grew to $7 million in 3QFY21, which was up 18% from $5.9 million in the same period last year. Additionally, operating income and net income were both up year-over-year.
The company has a track record of maintaining profitability, even when industry outlook worsened during the global pandemic. Both revenue and gross profit trended to new highs in 2021, which in turn boosted bottom-line results.
The stock has substantial institutional ownership of 17%, with its largest shareholder being Morgan Stanley. There are 24 institutional investors and the top 2 holders account for 12% of the shares outstanding. Additionally, it is worth noting that insiders do not trade the stock frequently. Large insider and institutional ownership is rare for a small stock, but is reassuring for long-term investors.
Regardless of its substantial ownership and fantastic dividend, the fundamentals are evidence of the company’s success. Assets outweigh liabilities 5:1 and there is minimal debt. Its cash position grew to $16.1 million in the recent quarter and cash flows slightly improved year-over-year. Its current ratio of 3.4 is double that of its competitors and represents minimal liquidity risk.
In conclusion, MNDO is a great dividend stock for long-term investors that has a proven history of consistently rewarding shareholders. We consider this a lower-risk investment idea for the coming year.
