Yahoo Finance North American Construction (NOA) Stock Up on Contract Win
North American Construction Group Ltd. or NACG NOA recently announced that Mikisew North American Limited Partnership (MNALP) has secured a contract from a major oil sands producer. The contract extends the existing master service agreement between NACG and the producer but transitions to MNALP as the contractor.
Following the news, the company’s shares rose more than 6% on Sep 14 during the trading session.
The scope of work under the contract has been extended till December 2023.
NACG owns a 49% stake and voting interest in MNALP, with the majority owner (51%) being the Mikisew Group of Companies.
The company expects the contract to generate revenues of $275 million over the term of the agreement and boost its combined backlog to a record level of $1.9 billion.
In this regard, Joe Lambert, president & chief executive officer of NACG, said, “Consistent with our corporate strategy, sustainability goals and previous communications, we are pleased to be growing our oil sands business and Indigenous partnerships while achieving our diversification goals.”
He further added, “We continue to focus on our diversification strategy by having more customers in more commodity markets and geographic regions.”
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Meanwhile, shares of NACG have gained 30.7% over the past six months against the industry’s 9.1% plunge. Continued indigenous partnership growth, expanding internal and external maintenance capabilities, progress on sustainability plans, increasing market diversification, growth, record backlog, record-free cash flow projections, record low senior leverage ratio, and increased overall opportunities with line-of-sight to achieve or exceed strategic goals have been driving NACG’s performance.
Zacks Rank & Key Picks
NACG currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the broader Construction sector include Granite Construction Incorporated GVA, Altair Engineering Inc. ALTR and Sterling Construction Company Inc. STRL. While Granite Construction currently sports a Zacks Rank #1, the other two stocks carry a Zacks Rank #2 (Buy).
Granite Construction, Altair, and Sterling Construction’s earnings for 2021 are expected to increase 40%, 64.5%, and 30.3%, respectively.
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