The Motley Fool

Monadelphous share price climbs higher after acquisition news

The Monadelphous Group Limited (ASX: MND) share price has climbed 0.93% higher on the ASX today. 

The big news moving the company’s shares was its acquisition of 2 Chilean businesses today.

What is moving the Monadelphous share price today?

Monadelphous has purchased Chilean based construction and maintenance-based services contractor, Buildtek SpA as well as plant and equipment hire company, Maqrent SpA.

The purchase of 75% of the companies will cost the company $9.5 million in cash with an option for the remaining stake in three years time.

The companies’ founder Victor Valech will stay on in Chile to manage the 700-person operation.

The move will see Monadelphous expand into the potentially lucrative South American market.

How have the company’s shares reacted?

Investors have been bullish on the news as the Monadelphous share price has climbed 0.93% higher to $15.72 per share.

It’s a welcome boost for shareholders given the share price is down more than 18% since late July. The construction engineering company is still up for the year but has underperformed the S&P/ASX 200 Index (ASX: XJO) in 2019.

The company has been busy this year signing new contracts and boosting earnings despite buildings headwinds. The company was awarded a major $100 million contract by Rio Tinto Ltd (ASX: RIO) back in August as well as a lucrative deal with Origin Energy Ltd (ASX: ORG).

What about the other engineering contractors?

It’s been a strong year for many of the ASX engineering contractors. The Seven Group Holdings Ltd (ASX: SVW) share price is up 40.16% so far this year following an earnings rebound.

Seven shares are down 0.75% today, while the ASX 200 Index is trading 0.43% higher at 6,727 points.

Are Monadelphous shares good value?

The Monadelphous share price is trading at $15.72 per share with a tidy 3.05% dividend yield. The company does trade at 29.32x earnings, which means weighing up how much you’re willing to pay for growth.

If you're after some other good value ASX dividend stocks then check out these 3 below!

Top 3 Dividend Shares To Buy For 2020

When Edward Vesely -- our resident dividend expert -- has a stock tip, it can pay to listen. With huge winners like Dicker Data (up 147%) and Collins Food (up 105%) under his belt, Edward is building an enviable following amongst investors that are planning for retirement.

In a brand new report, Edward has just revealed what he believes are the 3 best dividend stocks for income-hungry investors to buy now. All 3 stocks are paying growing fully franked dividends giving you the opportunity to combine capital appreciation with attractive dividend yields.

Best of all, Edward’s “Top 3 Dividend Shares To Buy For 2020” report is totally free to all Motley Fool readers.

Click here now to access this free report.

Motley Fool contributor Kenneth Hall 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.

FREE REPORT: Five Cheap and Good Stocks to Buy now…

Our Motley Fool experts have FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.7% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.

CLICK HERE FOR YOUR FREE REPORT!