Updating Shawcor Ltd.

Article Excerpt

SHAWCOR LTD. $19 (Toronto symbol SCL; Cyclical-Growth Payer Portfolio, Manufacturing & Industry sector; Shares outstanding: 70.1 million; Market cap: $1.3 billion; Dividend yield: 3.2%; Dividend Sustainability Rating: Above Average; www.shawcor.com) produces sealants and coatings to keep oil and gas pipelines from rusting. It also makes electrical wire and other industrial products. ShawCor last raised its quarterly dividend in May 2014 by 20.0%, to $0.15 a share from $0.125. The current annual rate of $0.60 yields 3.2%. The company will now buy Edmonton-based ZCL Composites Inc. (Toronto symbol ZCL). That firm makes fibreglass-reinforced plastic underground tanks that store fuel and wastewater. Customers include retail gas stations, oil and gas producers and municipal governments. ZLC operates 2 plants in Canada, 4 in the U.S. and one in the Netherlands. If ZCL shareholders approve, ShawCor will pay $308 million to complete the transaction in April 2019. In the nine months ended September 30, 2018, ZCL reported earnings from ongoing operations of $9.6 million. During that same time, ShawCor earned $21.5…

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