SNC-LAVALIN GROUP INC. $49 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 151.0 million; Market cap: $7.4 billion; SI Rating: Average) designs and builds a variety of large-scale projects, such as roads, bridges and electrical power systems. The company also has a long history of building conventional and heavy oil processing plants, as well as systems to produce difficult-to-extract heavy oil. Petroleum and chemical processing account for about 20% of SNC’s total revenue. Oil sands operators currently use natural gas to generate the steam needed to pump heavy oil to the surface. Gas accounts for up to 60% of a well’s operating costs, so many project operators are looking into alternative forms of energy such as nuclear power. SNC has plenty of experience building nuclear power stations, so it would likely participate in any future construction. SNC’s stock has gained about 80% in the past year to a new high of $49. But at 45.0 times its projected 2007 profit of $1.09 a share, it’s expensive in relation to its immediate prospects. The $0.36 dividend yields 0.7%. SNC-Lavalin is a hold.
SNC-Lavalin Group Inc. $49 – Toronto symbol SNC
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