September 20, 2018

SNC-Lavalin (SNC)

 

 

SNC-Lavalin is one of Canada’s greatest engineering success stories, and has recently been recognized as one of Canada’s most stable and mature companies by the Canadian dividend growers list.  The company started as a small consulting firm in Montreal in 1911.  From those humble beginnings SNC-Lavalin has grew into an international engineering conglomerate that has 21,000 employees in more than 100 countries around the world.  If you are looking to diversify your portfolio, this is likely one of the more stable, dividend-paying, Canadian engineering stocks you can find.

 

The Canadian Dividend Growers List

 

Becoming a member of the Canadian dividend growers list means that a company has raised its dividend for 15 straight years.  Thanks to a true test of the markets in 2008, there are relatively few Canadian stocks that meet this lofty benchmark.  Even the “cash cows” also known as the oligopoly of Canadian banks (CIBC, Royal Bank, Scotia Bank, Bank of Montreal, Toronto-Dominion Bank, and the National Bank of Canada) did not make this elite list due to the fact that they had to freeze their dividends during the recession.  Investors who are seeking stable income streams can look upon a record like that and take real assurance that the company makes rewarding its shareholders a priority, as well as the fact that SNC-Lavalin (SNC) was strong to not only weather the financial storm, but thrive in it.  There are few stocks out there on the TSX that can say their dividend has seen a 25% increase over the gruelling last give years.  SNC joins such dividend stalwarts as Fortis Inc. and the Canadian National Railway on the Canadian dividend growers list.

 

In The News

 

SNC-Lavalin has been in the news a lot recently due to their massive 15-million dollar deal to buy the nuclear energy technology called the Candu reactor from the Canadian government.  This is just the most recent acquisition from a company that has been steadily growing for literally the last one hundred years.  Immediately upon announcing their take over, SNC management announced that they would be streamlining the company and making it more competitive by shedding 800 jobs, out of a 2,000 person workforce.  Citing the need to compete with private industry, the move was well received by shareholders, as stock prices climbed about 4% on the week.

 

Education Programs

 

One notable aspect about SNC-Lavalin (SNC) operations has been its close relationship with the education sector in Canada, and most recently on an international level.  The engineering powerhouse has connections to 13 of the best engineering programs amongst Canadian universities and has begin similar programs in the USA, France, Belgium, Chile and Egypt.

 

Summary

 

SNC-Lavalin (SNC) has operations in literally every area of engineering that I was able to research.  Their business model emphasizes flexibility and highlights the fact that they are one of the few companies on the international stage that can finance, design, build, own, operate and maintain infrastructure facilities worldwide.  Their dividend yield of 1.3% doesn’t look impressive at first glance, but with a company that has such a great balance sheet and growth profile, you will have to pay to get it.  It is worth noting that SNC employs about 12,000 people in Canada and about half of those employees feel strongly enough about the company to own shares in it.

 

SNC Canadian Dividend Stock Graph

TSE SNC

SNC Canadian Dividend Stock Metrics

 

TickerNamePriceDividend YieldPayout RatioDEBT_TO_MKT_CAPDividend Growth 5 yearsDividend Growth 1 years
SNCSNC-Lavalin Group Inc54.241.5523.50.369579225.6379816.12904

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