AMEC (AMEC)

AMEC (AMEC)

Intro
(ALISON AT DESK BEHIND LARGE TOY ELEPHANT.)

“Sometimes, the elephant in the room is worth a closer look”

Desk

It’s all too easy for many investors to pigeon-hole AMEC as a great big blue-chip hod-carrier.
Often described as merely ‘a construction company’, it actually spans engineering, project management and consultancy.
That means it can help big building projects get going, get dismantled and just about anything in between.
Although the company began life in construction – 160 years ago – it branched out to make its name as an expert in safe, sustainable projects and focused on the oil and gas, minerals and metals, clean energy, environment and infrastructure markets, setting up shop in around 40 countries.
The list of key customer reads like the FTSE, too, with BP, Shell, EDF, National Grid and U.S. Navy contracting AMEC services.
Not bad for a company that makes half its money from oil and gas services but doesn’t own a drill.
Amongst several recent bumper deals was a three-year contract with BG Group worth £140 million to provide services for all of its facilities in the central North Sea.
Revenue and profits and the order book keep heading in the right direction and the company said this year that it expects its growth to continue despite the economic sloth.
It’s making the most of its cash, too, buying three companies this year alone in an acquisitive spring spree.
Still not tempted?
Investors are also enjoying the spoils, with the 2010 dividend being hiked 50% to deliver a full-year payout of 26.5p while August’s interim divi was given a 40% boost to 10.2p.
If that has caught your attention then you might want to act while the stock is still bubbling under its peers – one of the attractions that made JP Morgan pick it as a sector favourite for 2011.