Having seen John Kingham’s post on BBY (Balfour Beatty) (http://is.gd/53AmeA), I decide to see what the score was with its peers in the heavy construction sector.
Here’s a list of epics for companies in heavy construction: ASH AUK BBY BHY BILN COST CTO GFRD GLE KIE KLR MGNS MOGP NMD PCH RNWH SMJ
Of all of the companies listed, only two met the standards of stable earnings by at least doubling their earnings over 10 years, and having at most two downturns in PES of 5% or greater. Those two companies are: BBY and KIE. BBY is on a yield of 5.13%, and KIE is on a yield of 5.08%.
BBY has an unblemished record in turns of earnings declines over the last decade, whilst KIE tripped up once. It did send its earnings down 41.1%, though. KIE has net cash of £131m, whilst BBY has net debt of £409m. Interest payments are not a problem for either company.
Kudos to John for spotting an high-yield conservative company that has shown a good track record in a yawn-worthy sector. As Peter Lynch would say, the guy who turns over the most rocks wins; if you’ll forgive the pun.