The Worley Ltd (ASX: WOR) share price is on watch this morning following an after-market update by the engineering group.
What did Worley announce yesterday?
Worley announced yesterday that it has received a new contract from the Holland-based Nouryon Chemicals B.V. (Nouryon).
Nouryon has awarded an agreement to Worley to provide engineering, procurement and construction management services.
The agreement with Nouryon will cover 20 of its chemical sites across Europe for 5.5 years.
Nouryon is the rebranded AkzoNobel Specialty Chemicals, which is now backed by US private equity firm Carlyle Group.
What else has been moving the Worley share price?
This latest contract comes hot on the heels of Worley's latest acquisition announcement just last week.
Worley purchased 100% of 3sun Group Ltd, a UK-based offshore wind energy installation, inspection and maintenance business.
Worley splashed £20 million (A$37.4 million) on the acquisition as it looks to build out its UK and European renewables business.
Management cited the following benefits behind the deal:
- Entry into the growing offshore wind energy Operations and Maintenance (O&M) business
- Acceleration of Worley's offshore wind energy strategy
- Extend 3sun's capabilities to larger projects and longer-term O&M contracts
- Expansion in North America and Asia Pacific through Worley and 3sun's capabilities
How have Worley shares performed in 2019?
Worley shares have had a volatile year. The share price hit as high as $16.45 per share in July 2019, but has since pulled back. At this morning's open, Worley shares are trading at $14.00 per share, which is up 23.46% since the start of January.
Solid earnings and consistent contract awards have been key to fuelling the company's shares to their current level.
Should you buy Worley shares?
While the Worley share price has performed strongly this year I still think they're a little pricey at 37.8x earnings. Worley is a large-cap with a $7.3 billion market cap and a solid 1.70% net dividend yield.
I'd be waiting until Worley's February results release before evaluating whether the lofty valuation is worth the growth potential on offer.
