The Motley Fool

CIMIC share price lower on first quarter update: Time to invest?

In morning trade the CIMIC Group Ltd (ASX: CIM) share price has edged 0.5% lower following the release of the engineering company’s first quarter update.

Here’s a summary of how CIMIC performed compared to the prior corresponding period:

  • Revenue came in 6% higher at $3.4 billion.
  • Net profit after tax grew 5% to $181 million.
  • Cash flow from operations up 60% to $248 million.
  • Net cash increased $700 million to $1.6 billion.
  • Outlook: NPAT guidance of $790 million to $840 million confirmed.

This strong quarterly result was driven by solid performances across all of CIMIC’s operating companies.

The company’s CEO, Michael Wright, was pleased the quarter.

He said: “Driven by a rigorous focus on operational delivery and risk management we continue to create valued outcomes for our clients. Our recent success in both the PPP and Alliance packages for Brisbane’s $5.4 billion Cross River Rail is a prime example in which we’ve been able to offer a unique solution to our client that delivers the best of CIMIC Group, drawing together specialist skills across our companies.”

The good news for shareholders is that there is a significant pipeline of potential work that could support its future growth.

According to the release, management estimates that there are almost $110 billion of tenders to be bid and awarded during the rest of 2019. And in 2020 and beyond, the company has its eyes on a further $320 billion of tenders. Approximately $130 billion of these are related to public private partnership projects.

Should you invest?

Given the large number of infrastructure projects that are planned, it could be worth considering a little exposure to the sector.

And thanks to its portfolio of high quality companies, CIMIC could be one of the better options. Especially after this solid first quarter performance and its positive outlook.

Other options to consider are Cardno Limited (ASX: CDD) and Downer EDI Limited (ASX: DOW).

But if you're not keen on companies like CIMIC then I think these top blue chips would be great options.

Our Top 3 Blue Chip Shares for 2019 – NOW AVAILABLE!

You’re invited! For a limited time, The Motley Fool Australia is giving away an urgent new investment report detailing our 3 TOP BLUE CHIP SHARES to own in 2019.

So if you like trustworthy, stable, high-performing companies that pay fat fully franked dividends – we’ve got you covered!

Stock #1 is a beloved old Australian company turning its attention to high-margin businesses... and rapidly returning cash to shareholders with its hefty dividend...

While Stock #2 is an online powerhouse that’s rapidly gaining market share all around the globe... poised for years (or even decades) of tremendous growth...

Even better, Stock #3 offers a whopping 6.5% grossed-up dividend! Which beats the rates on term deposits right out of the water – and offers the potential for capital gains, too.

You can discover all three shares inside our new report right now. To scoop up your FREE copy, simply click the link below right now. But you will want to hurry – this free report is available for a LIMITED TIME ONLY!


Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

One ASX Stock For An Estimated $US22 Billion Marijuana Market

A little-known ASX company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.

And make no mistake – it is coming. To the tune of an estimated $US22 billion.

Cannabis legalisation is sweeping over North America, and full legalisation arrived in Canada in October 2018.

Here’s the best part: we think there’s one ASX stock that’s uniquely positioned to profit immensely from this explosive new industry… taking savvy investors along for what could be one heck of a ride.

AND, this is the first time The Motley Fool Australia has EVER put a BUY recommendation on a marijuana stock.

Simply click below to learn more on how you can profit from the coming cannabis boom.

Click here to find out more