Chicago Bridge & Iron Co. N.V.
) recently announced a 40% increase in its quarterly dividend to
7 cents from 5 cents per share paid on Dec 18, 2013. The
increased dividend will be paid on Mar 31, 2014 to shareholders
of record on Mar 21. Based on the closing share price of $79.86
on Feb 20, 2014, the new dividend implies a dividend yield of
Though this substantial hike came after an interval of three
years, the news failed to move investors' sentiments as the
company's stock price decreased 0.1% on the day, possibly because
of the its still poor dividend yield. Even after the hike, CBI's
yield is far below the industry average of 1.44%.
Its previous dividend increase took place on Mar 16, 2011,
when it was had raised the payout to 5 cents from 4 cents per
This latest dividend increase is supported by the company's
modest cash and cash equivalents which stood at $543.0 million at
the end of the last reported quarter (third-quarter 2013). Also,
the company ended the third quarter with a healthy backlog level
of $24.5 billion, which reflected its strong revenue generation
Recently, the company received a couple of new contracts from
CF Industries and Kuwait National Petroleum Company. The
aggregate value of these contracts is approximately $470 million.
Moreover, on Feb 5, it had received a fabrication contract from
Dow Chemical Co.
) for an undisclosed amount.
The company's operational performance will be fueled by the
growing global demand for energy infrastructure, especially in
the LNG gas processing and oil sands markets. This, in turn, is
expected to fortify its financial position going forward. With
approximately 107.3 million shares outstanding at the third
quarter-end, the company needs to dish out $30.0 million annually
CBI currently carries a Zacks Rank #4 (Sell). Some
better-ranked stocks in the heavy industries sector include
Orion Marine Group, Inc
Quanta Services, Inc.
). Both of these have a Zacks Rank #2 (Buy).
CHICAGO BRIDGE (CBI): Free Stock Analysis
DOW CHEMICAL (DOW): Free Stock Analysis
ORION MARINE GP (ORN): Free Stock Analysis
QUANTA SERVICES (PWR): Free Stock Analysis
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