If Macquarie Telecom is boring, boring, MyNetFone is anything but. We don’t recall coming across a company which pays a dividend, yet we consider it to be speculative.
MyNetFone (ASX: MNF) offers Voice over Internet (VoIP), data, video and cloud services to residential and business customers in Australia, NZ and Singapore via two divisions: MyNetFone and Symbio Group.
At first sight financials are not impressive. At the current share price the dividend yield is just 2.8%, but this is covered 2.3 times by an earnings yield of 6.9% (PE: 15). It gets better when you look at their growth ratios. They listed in 2006 and became profitable in 2009. Since 2010, per share Revenue is up 97% pa, Operating Cashflow is up 165% pa and Dividends are up 93% pa. They may not be able to spell, but their Return on Equity (ROE) is a massive 120% pa. New contracts and targeted takeovers are emerging continually, with a recent win being a $20M contract to provide Voice over Internet (VoIP) capability for the Tasmanian Government.
They just took over CallStream, a Melbourne based ISP business, for $600,000 with an immediate yield of 100% pa (before synergies are considered). This is BAD :) because it will slightly lower their mighty ROE of 120% pa.
We made a two small investment in November averaging 86 cents ps.
PS: The share price is up 29% since then. They have just announced purchase of GoTalk’s wholesale business on good terms.