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John Wood Group PLC Upbeat After Winning Work With Royal Dutch Shell Plc And The Dow Chemical Company

The shares of John Wood (LSE: WG) advanced 2% to 795p during early London trade this morning after the company said its engineering division’s operating profits were on track to grow by 15% this year.

John Wood announced it was likely to meet the market’s growth expectations for 2013, while confirming it had won pipeline engineering contracts with Dow Chemical (NYSE: DOW.US) in the USA. Highlighting the group’s international dealings, John Wood also confirmed it had won work with Shell (LSE: RDSB) (NYSE: RDS-B.US) on a project in Iraq.

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Elsewhere, the company said it was benefiting from increased activity in the US shale regions, while its work on Ichthys and Mafumeira Sul upstream projects were progressing well.

The company added:

“Looking further ahead, our strong balance sheet, market fundamentals, leading positions, and balance of opex and capex related activities position the Group well for longer term growth.”

With a market cap of £2.8bn, John Wood’s shares trade at 12 times expected earnings, and offer a prospective dividend yield of 1.8%.

Of course, whether that valuation, today’s update and the future prospects for the energy industry all combine to make shares of John Wood a ‘buy’ remains your decision.

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The Fool’s choice recently revealed its dividend would increase “at least in line with the rate of UK inflation”, and provides a market-beating 5% yield.

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> Mark does not own any share mentioned in this article.

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