By Dean Seal

An investor in Civeo is calling on the company to eliminate its dividend and launch a stock buyback in an effort to boost its share price.

Engine Capital said Tuesday Houston-based Civeo, of which it owns a 9.8% stake, is meaningfully undervalued in the public market and that the board needs to take immediate action to close the valuation gap.

Shares closed the market at $20.74 on Monday. That's a deep discount to its intrinsic value, based on a multiple of its enterprise value to a 2025 earnings metric, Engine said. The firm is calling for Civeo to get the stock up to $47.

To do so, the provider of workforce housing and accommodations should eliminate its dividend, start aggressively repurchasing shares and significantly cut costs, Engine said.

The hedge fund is also floating a potential strategic alternative to get Civeo off of the public market. Engine said the company could be sold for between $39 and $50 a share, based on its calculations, and it believes the board should proactively approach buyers.

"It is obvious that Civeo is not a good U.S. public company, and that the company's discounted valuation is largely a result of structural problems," Civeo said in a letter to the board.

Write to Dean Seal at dean.seal@wsj.com

(END) Dow Jones Newswires

March 18, 2025 09:20 ET (13:20 GMT)

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