stantec

STANTEC INC. $67.93 (Toronto symbol STN; TSINetwork Rating: Extra Risk) (780-917-7288; www.stantec.com; Shares outstanding: 46.8 million; Market cap: $3.1 billion; Dividend yield: 1.1%) sells a range of consulting, project-delivery, design and technology services. Its clients operate in a variety of industries, including oil and gas, transportation and construction. In the quarter ended June 30, 2014, Stantec’s revenue rose 13.0%, to $530.3 million from $469.4 million a year earlier. Earnings gained 22.6%, to $44.3 million, or $0.95 a share, from $36.1 million, or $0.78. Timely move into Quebec...

STANTEC INC. $67.93 (Toronto symbol STN; TSINetwork Rating: Extra Risk) (780-917-7288; www.stantec.com; Shares outstanding: 46.8 million; Market cap: $3.1 billion; Dividend yield: 1.1%) sells a range of consulting, project-delivery, design and technology services. Its clients operate in a variety of industries, including oil and gas, transportation and construction.

In the quarter ended June 30, 2014, Stantec’s revenue rose 13.0%, to $530.3 million from $469.4 million a year earlier. Earnings gained 22.6%, to $44.3 million, or $0.95 a share, from $36.1 million, or $0.78.

Timely move into Quebec

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STANTEC INC., $72.20, symbol STN on Toronto, is buying Montreal-based Dessau, a distressed firm that’s one of a number of companies caught up in a Quebec government inquiry into corruption in the construction industry. The purchase will add 1,300 employees at 20 offices throughout Quebec. Stantec didn’t say how much it’s paying, but the move will add about $130 million to its annual revenue. To put that in perspective, Stantec reported $530.3 million of revenue in the latest quarter. The corruption inquiry is investigating Dessau in connection with illegal financing of political parties. However, under the terms of the deal, Stantec won’t be responsible for any of the millions of dollars in fines or penalties that Dessau may have to pay....

STANTEC INC. $72.86 (Toronto symbol STN; TSINetwork Rating: Extra Risk) (780-917-7288; www.stantec.com; Shares outstanding: 46.8 million; Market cap: $3.4 billion; Dividend yield: 1.0%) plans to split its shares on a 2-for-1 basis, effective November 14, 2014. When a company’s share price goes up, it has an incentive to split the stock to make it seem cheaper to investors, who may then buy more. This can make the stock more liquid than if the firm refrained from splits and let its share price go to uncommonly high levels. Shares of Stantec are up 1,982% since we first recommended the company (then called Stanley Technology Group) at $3.50 in one of our first issues of Stock Pickers Digest in 1998....

SASOL LTD. (ADR), $56.09, symbol SSL on New York, has developed a technology to convert coal and natural gas into motor fuels. The company is the world’s largest producer of fuel from coal at its Secunda, South Africa, facility. It also makes synthetic fuels from natural gas at plants in Qatar and Nigeria. As well, Sasol produces chemicals, oil and gas in Africa. It’s also South Africa’s third-largest coal producer. In its 2014 fiscal year, which ended June 30, 2014, Sasol’s revenue rose 19.3%, to 202.7 billion South African rand (1 rand = $0.1039 U.S.) from 169.9 billion rand in fiscal 2013. Earnings per ADR rose 14.3%, to a record 60.16 rand from 52.62 rand. Oil prices were relatively flat, and chemical prices were higher. The U.S. dollar also rose against the rand, increasing the value of Sasol’s sales outside South Africa....

STANTEC INC. $72.86 (Toronto symbol STN; TSINetwork Rating: Extra Risk) (780-917-7288; www.stantec.com; Shares outstanding: 46.8 million; Market cap: $3.4 billion; Dividend yield: 1.0%) plans to split its shares on a 2-for-1 basis, effective November 14, 2014.

When a company’s share price goes up, it has an incentive to split the stock to make it seem cheaper to investors, who may then buy more. This can make the stock more liquid than if the firm refrained from splits and let its share price go to uncommonly high levels.

Shares of Stantec are up 1,982% since we first recommended the company (then called Stanley Technology Group) at $3.50 in one of our first issues of Stock Pickers Digest in 1998.

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TIM HORTONS INC., $87.40, symbol THI on Toronto, jumped 27% this week after agreeing to a friendly takeover offer from Miami-based Burger King Worldwide (New York symbol BKW). The combined firm would be the world’s third-largest fast-food operator, after McDonald’s and Yum Brands, with annual sales of $23 billion U.S. and 18,000 restaurants in over 100 countries. Canada will supply 67% of the merged company’s revenue, followed by the U.S. (20%) and other countries (13%). The Tim Hortons and Burger King chains will operate independently but will probably share some back office and distribution networks. Tim Hortons can also use Burger King’s expertise to expand in the U.S. and other countries....

DOREL INDUSTRIES $37.90 (Toronto symbol DII.B; TSINetwork Rating: Extra Risk) (514-731-0000; www.dorel.com; Shares outstanding: 32.3 million; Market cap: $1.3 billion; Dividend yield: 3.3%) makes a range of items, including ready-to-assemble home and office furniture; juvenile products, such as car seats, strollers, high chairs, toddler beds and cribs; and recreational goods, mainly bicycles. In the three months ended March 31, 2014, Dorel’s sales rose 9.0%, to $647.7 million from $594.2 million a year earlier (all figures except share price and market cap in U.S. dollars). Sales rose 18.1% at the recreational segment and 2.0% at the home-furnishing division. Juvenile products sales gained 5.5%. Earnings per share rose 11.4%, to $0.78 from $0.70. Sales of its high-profit Cannondale and Pacific Cycle premium bikes rebounded with an early spring in Europe. As well, Dorel’s 70% stake in Caloi, which it acquired last year, is now adding to its profits....

STANTEC INC. $69.35 (Toronto symbol STN; TSINetwork Rating: Extra Risk) (780-917-7288; www.stantec.com; Shares outstanding: 46.7 million; Market cap: $3.2 billion; Dividend yield: 1.1%) sells a range of consulting, project-delivery, design and technology services. Its clients operate in a variety of industries, including oil and gas, transportation and construction.

In the quarter ended March 31, 2014, Stantec’s revenue rose 12.7%, to $481.3 million from $426.9 million a year earlier. Acquisitions were one reason for the gain. Stantec is also working on many new projects, including major pipelines and the huge Westside Subway Transit Corridor in southern California.

Earnings gained 17.9%, to $33.5 million, or $0.72 a share, from $28.4 million, or $0.62.

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YAMANA GOLD INC., $8.38, symbol YRI on Toronto, has succeeded in its joint $3.9-billion bid with Agnico Eagle Mines (symbol AEM on Toronto) for Osisko Mining (symbol OSK). Goldcorp (symbol G) has withdrawn its offer. Agnico Eagle and Yamana will now each own half of Osisko’s assets, including the Canadian Malartic gold mine in Quebec. The acquisition lets Yamana diversify beyond South America and Mexico, where it has seven mines. It should also boost the company’s per-share cash flow. Yamana Gold is still a buy....