Friday, March 27, 2009

SNC-Lavalin 2

To start on a positive note, this company (TSX-SNC) has raised their dividend to $.15 a share for the first one due in March 2009. This is a 25% raise in their dividends. It shows that the company has faith in the stock and expects it to do well in the future.

The other thing to mention is that this stock is on everyone’s great dividend paying stock lists. This stock is on the Dividend Achievers list at, the Dividend Aristocrats list at (see indices) and also on Mike Higgs’ list at The next thing I looked at was Insider Buying and Selling on this stock. There was an awful lot of Insider Selling from April to September of 2008. There has recently been a modest amount of Insider Buying and Insider Selling since. Most of the Insider Buying has been in the $30 - $35 range.

I then looked at the spreadsheet to see how the ratios were doing. The most important is the Price/Earning Ratio (P/E) and the Yield. The P/E ratio has come down a lot. The 5 year average is over 30. The current P/E is 15. The 5 year average for the Yield is less than 1%. The current yield is 1.9%. Both these ratios point to a good price. However, you should note that on Mike’s list, he gives an historical high dividend yield of 2.10% and a historical average of 1.60%. On this basis, this stock is only better than the historical average yield.

The Globeinvestor site rates this stock a 4 star rating (out of possible 5 stars). The consensus rating on this stock is a Buy. There are a lot of Buy Ratings on this stock. There are a few Strong Buy Ratings and at least one Sell Rating. There are no other Ratings given by analyst. (See my site for information on analyst ratings.)

There are a couple of things that may not point to a good price. The first is the Price/Book Value ratio. This ratio is currently at 4.4 and the 5 year average is 5.52, but the 10 year average is 4.09. The other thing is the Graham Price. This stocks price is much higher than the Graham Price and the reason for this is that it is a growth stock. However, when this stock becomes a mature stock, you will probably see it fall to the Graham Price. When this might be, I do not know.

SNC-Lavalin are involved with engineering and construction work around the world, this includes infrastructure and Buildings; infrastructure and construction; power (nuclear, thermal, hydro etc); chemicals and petroleum; environmental projects; mining and metallurgy projects. They have offices and Canada and around the world, from Algeria to Vietnam, including Australia, Europe, Russia, Africa, Middle East, Asia, South America, USA. Its web site is See my spreadsheet on this company at

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at for a list of the stocks for which I have put up spreadsheets on my web site.

No comments:

Post a Comment