Shares in salary packaging service provider McMillan Shakespeare Limited (ASX: MMS) have fallen on Wednesday.

The drop in McMillan Shakespeare’s share price is roughly in line with the decline in the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) and the down market would appear to be a more reasonable explanation for McMillan’s fall than any specific negative investor reaction to the group’s interim financial results which were released after the close of trade on Tuesday.

Here’s why…

Revenue leapt 34% to $243.5 million, while underlying net profit after tax but before amortisation of acquisition intangibles jumped 34% to $41.8 million. McMillan can boast of a 10-year compound average growth rate (CAGR) in profits of 22% – an outstanding achievement.

On an underlying earnings per share (EPS) basis, the results were also good, with growth of 22% to 50.6 cents per share (cps). The 10-year CAGR in EPS stands at 19.3%.

Shareholders are set to receive a fully franked interim dividend of 29 cps on April 15, which will represent a 16% increase on the 25 cps received last year.

Turning to valuation, given the growth rates achieved and positive outlook management provided the current pricing of the stock appears compelling.

Based on a consensus forecast for full year EPS of 116.8 cps and dividends totalling 76 cps, the current share price of $11.60 implies a price-to-earnings ratio of just 9.9 times and a fully franked dividend yield of 6.5%. (Source: Thomson Consensus Estimates)

Those metrics certainly seem to be attractive and not only on an absolute basis but also relative to peers SG Fleet Group Ltd (ASX: SGF) and Smartgroup Corporation Ltd (ASX: SIQ) too.

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Motley Fool contributor Tim McArthur has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.