One might consider revenue growth to be an odd indicator for a resource stock yet a few companies have excelled at this in recent years, which for some has resulted in a superior share price performance and/or a decent dividend yield. Thus, SmallCapPower has identified four TSX-listed natural resource related companies that have achieved the highest compound annual sales growth over the past five years.
Mandalay Resources (TSX: MND) – 257.2% (5-Year CAGR)
Mandalay has a producing gold mine in Sweden, a silver-gold mine in Chile, a gold-antimony mine in Australia, as well as a development project in Chile. The company intends to acquire assets only at a deep discount, at or near the bottom of the resource cycle.
During the past five years, Mandalay has increased its annual gold equivalent production nearly 10 fold to approximately 155,000 ounces. In 2014, the company reported revenue of $184.6 million, up from $166.9 million in 2013.
Mandalay is profitable and even has a dividend policy, currently distributing an annualized payout of 6% of gross revenue. Its stock, therefore, has a dividend yield of 5.4% based on its present market price of $0.90 a share. Mandalay Resources shares have returned about 235% over the past five years.
Western Energy Services (TSX: WRG) – 142.6% (5-Year CAGR)
Western Energy Services Corp. is an oilfield service company that provides contract drilling services through Horizon Drilling in Canada and Stoneham Drilling Corporation in the United States, in addition to well servicing and rental services. It is the sixth largest drilling company in Canada.
Western Energy Services’ 2014 operating revenue totaled $474.1 million, a 34% increase from 2013. Its stock has a current dividend yield of about 4.7% based on a $6.23 market price and approximately 75 million shares outstanding.
And despite the recent slide in oil prices, Western Energy Services says it is well positioned to manage the current slowdown in activity from its customers and it intends to maintain a “sustainable dividend.” The company’s five-year stock performance has been hurt by the weakness in the energy sector during the past year but has still managed a 25% gain, excluding dividends.
Silver Standard Resources (TSX: SSO) – 124.2% (5-Year CAGR)
Silver Standard has two producing mines: the Pirquitas silver/zinc mine in Argentina and the Marigold gold mine in Nevada, as well as development and exploration assets throughout North and South America. The company is generating free cash flow and currently has about $185 million in cash in addition to $105 million in securities, which includes shares of Pretium Resources and Argonaut Gold.
Silver Standard’s 2014 revenue increased to $300.1 million from $174.7 million in 2013, while its net loss for the year narrowed to $126.4 million from $230.0 million. Its five-year share price performance, however, has been one to forget, much like many of its peers in the precious metals space.
Turquoise Hill Resources (TSX: TRQ) – 123.0% (5-Year CAGR)
Turquoise Hill owns a 66% interest in the Oyu Tolgoi copper-gold-silver mine in Mongolia and recently divested its stake in coal miner SouthGobi Resources.
In 2014, Oyu Tolgoi produced 148,400 tonnes of copper and 589,000 ounces of gold in concentrates compared to 76,700 tonnes of copper and 157,000 ounces of gold in concentrates in 2013. Turquoise Hill recorded net revenue of approximately $1.6 billion in 2014 (Oyu Tolgoi’s first full year of operation), compared with $52 million in 2013, while it swung to a profit of $31.8 million from a loss of $112.0 million.
Turquoise Hill had cash and cash equivalents of $862.8 million as of December 31, 2014. The company’s five-year stock price performance, though, reflects the slump in the natural resource space over the past few years.
