Ushering in good news for Quanta Services, Inc. 's PWR shareholders, the company has initiated quarterly dividend. The company will pay initial quarterly dividend of 4 cents per share on Jan 26, 2019 to its shareholder of record as of Jan 2.
The dividend yield, based on the last closing market price, is approximately 0.51%. Per Quanta Services, it wished to increase the amount of dividend over time.
Duke Austin, president and CEO of Quanta Services, said "Our decision to initiate a dividend demonstrates our continued confidence in the stability of Quanta's base business, long-term growth prospects, solid financial position and commitment to enhancing stockholder value." As of Sep 30, 2018, Quanta Services' cash and cash equivalents totaled $113.5 million.
Notably, dividend not only enhances shareholder returns but also raises the market value of the stock. In fact, companies often tend to attract new investors and retain the old ones through this strategy. In the past six months, shares of the company have lost 14.9% compared with the industry 's 14.7% decline.
What Led to the Dividend Initiation?
Quanta Services has been performing well on both top- and bottom-line front. Also, it is experiencing strong end-market results and diverse scale of operations. As a result, the company raised its full-year 2018 earnings and revenue guidance.
Moreover, the company's three-pronged growth strategy as well as strength in Electric Power and Oil & Gas segments bode well for its future earnings prospects. Also, the company's focus on acquisitions serves as a fundamental component to boost its backlog.
The initiative includes timely delivery of projects to exceed customer expectation, leveraging on core business to expand in complementary adjacent service lines and continuously exploring new service lines.
Overall, the company's engineering and project management capabilities allow it to capitalize on market trends that are currently skewed toward an engineering, procurement and construction or EPC model.
Quanta Services, which shares space with Fluor Corporation FLR , has a Zacks Rank #3 (Hold).
Stocks to Consider
Better-ranked stocks worth considering in the same space include Altair Engineering Inc. ALTR and KBR, Inc. KBR . Both the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Altair Engineering reported better-than-expected earnings in the trailing four quarters, the average beat being 102.1%.
KBR has an impressive long-term earnings growth rate of 9%.
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