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Jacobs’ South African JV Business Wins New Deal from Sasol


Jacobs Engineering Group Inc. JEC further strengthened its long-term relationship with Sasol Group Technology, on the back of a new two-year long project management service contract win.

Over the last six months, Jacobs’ shares yielded a return of 10.5%, outperforming 5.2% growth recorded by the industry.

Notably, the company’s earnings per share are projected to be up nearly 8.7% in the next three to five years.

Sasol Deal

Sandton, South Africa-based Sasol Limited (Sasol) is an integrated chemical and energy company. It is also a major research and development, skill development and capital project investor of the country. The company’s engineering services, capital project implementation portfolios and engineering services are handled by Sasol Group Technology.

Jacobs’ South African joint venture — Jacobs Matasis (Proprietary) Limited — has secured the above-mentioned deal. Per the deal, this JV unit will provide its specialized resources and premium project management services for the various small-scale projects of Sasol Group Technology. These services will be provided in the domains of quality management and construction management, safety management, and engineering and project controls services.

Jacobs has been providing project management services to Sasol for the last four years. The company noted that it shall continue to deliver similar amenities to Sasol going forward, thereby supporting its efforts in securing accessibility of chemicals and energy in South Africa.

Contract-Based Growth

On Oct 11, Jacobs signed a sulfur-recovery technology licensor covenant with Paqell. Just day before, the company won a four-year contract from Dounreay Site Restoration Limited for providing electrical, mechanical, control and instrumentation services in the latter’s European nuclear decommissioning projects. Notably, since early September, Jacobs has secured contracts from Evonik Industries, Department of Energy National Nuclear Security Administration (NNSA), Aerie Pharmaceuticals, Inc. AERI and Ferring Pharmaceuticals Inc. In August, it also signed an agreement to acquire CH2M HILL Companies Ltd., which is in sync with its efforts to become a $15-billion global solutions provider over the long run.

The company quotes competitive prices for its contracts and ensures that the number of contract receipts increases over time. Notably, elevated transportation spending of the government authorities of Australia, the U.K. and the United States has largely increased the company’s contract-winning opportunities.

Stocks to Consider

Installed Building Products, Inc. IBP carries a Zacks Rank #2 (Buy) and generated an average positive earnings surprise of 0.67% in the last four quarters. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Beazer Homes USA, Inc. BZH also holds a Zacks Rank #2 and pulled off an outstanding average positive earnings surprise of 103.47% during the same time frame.

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