Savvy acquisitions spur their dividends

Article Excerpt

These two firms are subject to the ups and downs of cyclical industries, but their strong reputations and high-quality clientele should let them keep raising their dividends. SNC-LAVALIN GROUP INC. $55 (Toronto symbol SNC; Cyclical-Growth Portfolio, Manufacturing & Industry sector; Shares o/s: 175.5 million; Market cap: $9.7 billion; Dividend yield: 2.1%; Dividend Sustainability Rating: Above Average; www.snclavalin.com) is a leading Canadian engineering and construction firm specializing in large infrastructure projects, including roads, bridges and water-treatment plants. Starting in March 2018, SNC increased its quarterly dividend by 5.1%, to $0.287 a share from $0.273. The new annual rate of $1.148 yields 2.1%. The company paid $3.5 billion in July 2017 for U.K.-based engineering firm WS Atkins plc, the largest acquisition in its history. Atkins specializes in industrial projects such as railways, nuclear power plants, water-treatment facilities and highways. To help fund this purchase, SNC sold $880 million worth of common stock at $51.45 a share. The company also sold $400 million in common shares at the same price to…

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