Toll operator Highway 407 surprises with second dividend in the fourth quarter

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TORONTO - Toll highway operator 407 International Inc. declared an unexpected second large dividend in the fourth quarter of 19 cents per share.

The payout announced Friday was payable to shareholders of record that day.

In October, the company, which is partially owned by SNC-Lavalin (TSX:SNC) and the Canada Pension Plan Investment Board, declared a 24.5 cents per share dividend.

Consequently, the CPPIB — which invests surplus funds that aren't required to pay current benefits for the Canada Pension Plan —has received $134.85 million in dividends in the quarter for its 40 per cent stake in the Toronto toll road.

Montreal-based SNC-Lavalin's share is $56.5 million for its 16.77 per cent stake.

The remaining 43.23 per cent of the 775 million outstanding shares are owned by Cintra Infraestructuras S.A., a wholly owned subsidiary of Ferrovial S.A.

The toll operator paid just 11.3 cents per share in each of the first three quarters of the fiscal year.

Pierre Lacroix of Desjardins Capital Markets said the second dividend is positive for SNC-Lavalin and provides "solid support" for his $10 per SNC share evaluation he assigns to 407 International in his $54 target price for the engineering and construction giant.

On the Toronto Stock Exchange, SNC-Lavalin shares gained 34 cents at $38.09 in morning trading.

Organizations: SNC-Lavalin, 407 International Inc., Canada Pension Plan Investment Board TSX Ferrovial S.A. Desjardins Capital Markets Toronto Stock Exchange

Geographic location: TORONTO, Canada, Montreal

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