Jacobs Wins New Contract

Yesterday, Jacobs Engineering Group Inc. (JEC - Snapshot Report) received a contract from the Stanford University Medical Center in Palo Alto, Calif. According to the contract Jacobs will provide program and construction management services for the New Stanford Hospital and Lucile Packard Children's Hospital Expansion Projects. However, the contract value was not disclosed.
 
Recently, the company also received a contract from Abu Dhabi Polymers Company (Borouge) to develop front-end engineering and design (FEED) for a section of the "Borouge 3" project, a grassroots polypropylene/polyethylene facility in Abu Dhabi in the United Arab Emirates.
 
With annual revenues exceeding $12 billion, Jacobs’ is one of the world's largest and most diverse providers of technical, professional and construction services. Its major competitors are Foster Wheeler AG (FWLT - Analyst Report) and Fluor Corp. (FLR - Snapshot Report).
 
The company’s diversification in terms of markets, geography and services will continue to facilitate future growth. Moreover, Jacobs’ cost focus puts it in a dominant position to expand margins under difficult economic circumstances.
 
At the end of the third quarter, the company’s net cash position grew to $1 billion, up $254 million from the previous quarter and over $450 million from the beginning of 2009. Thus, this is a great story from an investment perspective. Jacobs has a strong balance sheet, which is expected to grow at a compound rate of 15% over the long-term.
 
Jacobs is among those infrastructure stocks that may benefit from the coming construction boom. Looking forward, as banks get healthy and are willing to lend and the next round of stimulus begins, investors can expect infrastructure projects to increase.