Rising backlog cuts ShawCor’s risk

Article Excerpt

SHAWCOR LTD. $39 (Toronto symbol SCL; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 69.9 million; Market cap: $2.7 billion; Price-to-sales ratio: 2.3; Dividend yield: 1.5%; TSINetwork Rating: Average; www.shawcor.com) makes sealants and coatings to keep oil and gas pipelines from rusting. It also makes electrical wire, protective sheaths and other industrial products. Higher oil prices have spurred drilling activity, and ShawCor’s order backlog rose to $650 million as of December 31, 2016, from $358 million at the end of March 2016. The current backlog is equal to 54% of the company’s 2016 revenue of $1.2 billion. ShawCor is currently working on projects worth over $1.7 billion. The company also continues to wait on decisions involving over $700 million worth of bids. Its strong reputation should help it win a significant share of those orders. ShawCor is a buy. buy…