We recommended WorleyParsons Ltd (ASX: WOR, OTC: WYGPF, ADR: WYGPY) as a buy in the In Focus feature for the Sept. 26, 2011, debut issue of Australian Edge.

The stocks we highlighted in that piece, Mining and Energy: Where to Find Income and Growth in Australia, generated an average total return of 33.72 percent through Feb. 9, 2012, including an impressive appreciation of the Australian dollar versus the US dollar for American investors.

These recommendations have of course benefitted from a firming of sentiment around the world, which itself is the product of solidifying US economic data, slow, painful and still frustrating but nevertheless what can be called “progress” on Greece in Europe, and a track record from Chinese officials of doing just about everything they can to keep growth alive long enough to preserve their political stations.

The outbreak of positivity is reflected in the 16.44 percent run by the MSCI World Index since Australian Edge debuted, the 17 percent-plus rally for the S&P 500 since Sept. 26, 2011, as well as in the 24.42 percent total return generated by the S&P/Australian Securities Exchange 200 Index over the same timeframe.

WorleyParsons, which is up 30.87 percent since Sept. 26, wasn’t the best performer among this group of seven stocks. But it was an outperformer versus benchmarks, and it’s poised to boost its distribution when it releases fiscal 2012 first-half earnings Feb. 29.

During its Oct. 25, 2011, annual general meeting management forecast “good growth” in 2012, though earnings would be weighted to the second half. We’ll know more about operating results in a couple weeks. Since October, however, Worley has continued to win work and position itself for long-term growth.

Worley provides professional services to the resources and energy sectors and the complex process industries. It operates via four primary business segments: Hydrocarbons, Power, Minerals & Metals, and Infrastructure & Environment.

Major resource companies around the world continue to invest in new projects, and WorleyParsons is one of the few contractors with the global capabilities sufficient to support multinational customers. Its roster includes now-fellow AE Aggressive Holdings BHP Billiton Ltd (ASX: BHP, NYSE: BHP), Rio Tinto Ltd (ASX: RIO, NYSE: RIO) and Chevron (NYSE: CVX).

The company conducted early-stage analyses of Chevron’s 8.9 million metric ton per year, two-train Wheatstone project in Western Australia’s Pilbara region and recently won a AUD235 million contract to provide construction management services for the entire endeavor.

Worley recovered from a weak first half to post full fiscal 2011 profit growth of 25 percent, from AUD291.1 million to AUD364.2 million. Revenue grew 12 percent from AUD5.1 billion to AUD5.68 billion, as the company benefitted from work for BP Plc (London: BP, NYSE: BP) at Iraq’s supergiant Rumaila oilfield and at the Curtis LNG facility in Queensland.

Operating cash flow increased 5 percent to AUD294 million. Earnings per share were AUD1.215, while the company declared dividends of AUD0.86 per share, for a full-year payout ratio of 70.8 percent.

Since the October AGM Royal Dutch Shell (NYSE: RDS/A) has awarded WorleyParsons an Enterprise Framework Agreement (EFA) for work in North America, including the US and Canada. The five-year deal includes a two-year option; work contemplated includes the full range of engineering and procurement (EP) or engineering, procurement and construction management (EPCM) services at Shell’s downstream refining and chemical facilities in its North American portfolio, supply and distribution both on and offshore, unconventional resources and other onshore projects.

And its 50-50 joint venture (JV) partner PT Rekayasa Industri has been awarded an “improve” contract by PT Chevron Pacific Indonesia for overall program management, engineering and construction management services for Chevron’s oilfield assets all about the middle of Sumatra. The contract will provide estimated revenue of USD180 million to the JV over its five-year term.

From Jul. 1, 2010, to Jun, 30, 2011, Worley won more than 68 significant new long-term contracts and major project awards, including 37 new long-term “Improve” contracts–Worley’s term for deals to maintain, upgrade, and improve existing projects, which tend to be long-term and ongoing–increasing its worldwide portfolio to more than 230.

During fiscal 2011 Worley completed the acquisition of KV3 Engineers, a South Africa-based engineering consulting firm, as part of its strategy to expand in the developing world. KV3, now combined with WorleyParsons South Africa, will help the company execute on existing business relationships.

Worley also acquired a further 25 percent interest in its Saudi Arabia-based business, WorleyParsons Arabia Ltd, bringing its stake to 75 percent. Worley is now China’s largest foreign-owned engineering procurement and construction management services provider. Volume is up in the Middle Kingdom, and Worley is now doing more work for Chinese clients developing projects outside China. This is an important distinction.

Worley is our favorite among a group of mining and civil engineering contractors that includes Boart Longyear Ltd (ASX: BLY, OTC: BOARF, ADR: BLGPY), Leighton Holdings Ltd (ASX: LEI, OTC: LGTHF, ADR: LGTHY) and UGL Ltd (ASX: UGL, OTC: UGLLF). All of them will benefit from improving sentiment and the strengthening work-award trend. But Worley, in the words of its retiring chairman, is “arguably the most global of any of the companies operating in our sector.”

Ron McNeilly cites the increase of 5,100 people across its segments during fiscal 2011; Worley now employs more than 36,000 in 143 offices across 43 countries. In fact the biggest challenge Worley faces is attracting and retaining high-quality people.

As with all Australian companies with significant overseas operations, a strengthening Australian dollar will have a negative impact on the translation of foreign-currency earnings. Approximately 71 percent of Worley’s revenue is generated outside of

Australia, and management expects exchange-rate fluctuations to continue to have an effect on profits.

Management declared a final dividend of AUD0.50 per share, bringing the total dividend for the year to AUD0.86 per share, up 13.9 percent from AUD0.755 for fiscal 2010. The interim 2011 dividend boost was a modest 1.4 percent. The final dividend, however, was 25 percent higher, reflecting the fact that Worley’s cash flow is weighted to the second half of its fiscal year. The company cut its dividend once during the Great Financial Crisis but its return to increases and the proven durability of its work pipeline suggest a return to the pre-cut trend in the medium term.

Total debt as of Jun. 30, 2011, was less than 10 percent of market cap, and Worley had more than AUD160 million in cash on the books. Worley has AUD56 million outstanding on a AUD60 million revolving credit line maturing Jul. 31 and AUD225 million drawn on a AUD240 million line that comes due in 2015.

Likely to post a modest dividend increase along the lines of its last interim boost but also on course to replicate the larger, final move it made for fiscal 2011, WorleyParsons is a buy under USD30.

Worley trades on the Australian Securities Exchange (ASX) under the symbol WOR and on the US over-the-counter (OTC) market under the symbol WYGPF. It also trades as an American Depositary Receipt (ADR) with the symbol WYGPY on the OTC market. The ADR is equal to one ASX-listed share.

You will pay more if you choose directly on the ASX via a globally responsible broker such as Interactive Brokers or a new favorite, EverBank, but maybe not as much as you imagine. EverBank, for example, one of the first-movers in terms of offering international access to US-based banking and brokerage clients, charges about USD35 to execute a trade on the ASX. It’s important to note, however, that this fee includes the opportunity to speak with an actual person.

This is important for US-based investors, who are typically about half a day behind Sydney, Australia, where the ASX opens in the morning while those of us on the East Coast of America are sitting down for dinner the previous night. EverBank wants to be sure it gets your details correct, and it wants to make sure you understand your order entered during normal business hours in the US can’t be executed on the ASX until the trading day starts Down Under.

Another thing to do while you have a real person on the line is enter a “buy limit order,” where the price you pay is based on our recommended buy-under target.

A “buy limit order” is an order to purchase a security at or below a specified price. It allows you to specify the price you’re willing to pay for a stock. You’re guaranteed to pay your “buy limit” price or better if your order is filled. But there’s no guarantee your specified price will be met. We’re not traders, however, and should a price rise and stay above a target we’ll either adjust according to the dividend growth that justifies it or else avoid it because the market is simply in love with a story.