October 25, 2014

IBI Group Inc. (IBG)

 


 

The IBI Group Inc. (IBG) is another of the Canadian companies to go through a re-structuring in 2011 due to the change in tax rules regarding income trusts.  While these new tax adjustments skew the immediate financials of the company (especially the dividend numbers), a closer look reveals a solid engineering firm that ranks amongst the largest in Canada.  The company focuses on four main areas: Urban Land, Facilities, Transportation, and Intelligent Systems.  It even boasts the critically acclaimed Candlestick Park in San Francisco amongst its many noteworthy achievements.  IBI Group Inc (IBG) is clearly not just a regional Canadian engineering presence, but is an international company as well.

 


IBI GroupIBI started in 1974 with a self described, “Mandate to deliver integrates services based on sustainable planning and design.”  In the first 25 years of the company the original nine partners seen an increase in employee numbers from 30 to 500, and since then the IBI Group (IBG) has supplemented its natural growth with the acquisition of 32 established international firms.  In 2004 the IBI Income Fund and IBI Group Management combined under the income fund banner (in order to take advantage of the Canadian tax break granted to income trusts) and in 2011 the stock was renamed the IBI Group Inc. as the company went to a more conventional corporate structure.  They now have over 2,600 professionals working in 70 offices around the world.

 

IBI Group (IBG) believes that they key to sustainable development in 21st century urban environments is found it the integration of the four core disciplines – Urban Land, Facilities, Transportation, and Intelligent systems – that IBI offers.  They work with a wide range of clients that have a diverse set of needs and solutions.  IBI Group (IBG) works with public and private companies and offers services to clients that range from mega-conglomerates to small municipalities.  They specialise in the sectors of transportation, residential housing, recreational facilities (Candlestick Park), healthcare and education.  Their focus on transportation has proven to be especially lucrative as they have projects that include roadways, rail, air, marine, emergency services and parking facilities.

 

As a stock selection IBI Group Inc. (IBG) presents a mixed bag to investors.  On one hand they do offer a great dividend yield at 9.79%; however, since re-structuring from an income trust the dividend has actually fell almost 13% and I believe that trend will continue.  With a suspect debt-to-capital ratio of .81, I have my reservations about jumping into this stock with both feet.  The company’s most recent financial report claims that international growth prospects are strong, but I would wait to see their balance sheet stabilize as they complete their transition into a corporation before I would commit to a major investment position, especially with such established stalwarts as SNC-Lavalin (SNC) in the same sector of the TSX.

 

 

IBG Canadian Dividend Stock Graph

TSE IBG

IBC Canadian Dividend Stock Metrics

TickerNamePriceDividend YieldPayout RatioDEBT_TO_MKT_CAPDividend Growth 5 yearsDividend Growth 1 years
IBGIBI Group Inc14.587.57136.690.81276094.632799-10.3276

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