...because above is a chart of their dividend growth and below is how the shares have performed longer term.
This has left the shares on a sub 10x P/E with a 4.8% yield which is 2.3x covered based on another 15% or so dividend growth on current forecasts. However as they state in last years report and accounts: "Consequently, over two thirds of our underlying profit is now earned in the global Energy and associated energy infrastructure markets."
So that accounts for the recent weakness given the fall in the oil price and suggests that next years estimates may be under threat. Looking at how their Australian operations were affected by the mining downturn - this led to a fall of about 33% in profits from that division. So applying a similar hit to the 66% related to energy could I guess lead to a 20% or so fall in earnings overall.
However, not all the work will be oil related, they do make add on acquisitions and they could take action to reduce overheads quite quickly as this is a people business. So maybe they could restrict the hit to 10% but lets use say a 15% hit to next years numbers. This could still leave it on just over 10x earnings and the dividend would still be just over 2x covered based on my assumption of 15% downgrades which may of course be too sanguine. But if it is anywhere near the mark or even conservative then this may have proved to have been a great opportunity, especially if the oil price should bounce back quickly.
So there's today's idea for you, which given the title (the clue is in the title) puts me in mind of the song below. But if you haven't worked it out yet and really want to know what it is and want to do some more research on this suggestion, which is not a recommendation, then click the Advent Calendar window below.