"Globalization" and "infrastructure" are two of my favorite words. Globalization allows dynamic companies to expand around the world and enter new markets with goods and services that benefit customers and shareholders alike. Economic growth, in turn, requires more infrastructure.

To invest in this trend, you can turn to giant infrastructure operators like Germany's E.ON (NYSE:EON) or French rivals Suez (NYSE:SZE) and Veolia Environnement (NYSE:VE). But all that infrastructure needs operations and service support, too, which is where Australian multinational Transfield Services (OTCBB: TFFTF.PK) comes in.

The company describes itself as "a leading international provider of operations, maintenance, asset management and project management services." Transfield has operations around the globe. From the U.S. to Qatar to India, the firm provides services to a range of industries, including mining and process, roads, rail and public transport, utilities, telecommunications, facilities management, and defense, among others. Transfield's clients range from multinational corporations to all levels of government.

Transfield has more than 20,000 employees worldwide. As they describe it, "We're behind the scenes, ensuring water is clean, power is on, and our clients' businesses are operating smoothly and efficiently." They operate in two main sectors: infrastructure ownership and services. The company recently announced its intention to spin off the infrastructure division and retain a minority stake. It consists mainly of Australian and New Zealand utilities.

My interest in Transfield has been piqued for three primary reasons:

  • The company operates in "inevitable" sectors like power, water, oil and gas, and transportation. Unless global growth grinds to a halt, those sectors will continue to grow.
  • Its latest big contracts are all with top-tier companies. Its Canadian oil sands deal isn't with Moosejaw Drilling; it's with Suncor (NYSE:SU). Its TIMEC buy links it with U.S. oil majors, and its U.S. maintenance division already works with Wal-Mart and other Fortune 500 players.
  • It focuses on services growth over infrastructure operations. While the infrastructure side has superior margins, it's much harder to scale without taking on too much new debt, even more so internationally.

Judging by Transfield's preferred method of measuring profitability, EBITDA, the firm appears to be enhancing its profitability in services, its largest and, following the spin-off, soon to be only line of business. Both EBITDA and profit after tax climbed in the second half of fiscal 2006 to 4.3% and 2.5%, improvements of 79 and 20 basis points, respectively.

Top-line growth in the service division is strong, as well, with revenues up 16.6% over the same period. Citigroup expects overall sales growth of $350 million to $400 million in both 2007 and 2008, even without a majority stake in the infrastructure spin-off. Transfield's backlog of work orders now tops $6 billion thanks to its strong international growth.

With a market cap of US$1.8 billion and annual sales near $1.7 billion, Transfield is not expensive in price-sales terms. The trailing P/E sounds less than cheap at 30, but the firm's top-line and margin growth lead me to believe that the high multiple is justified.

Australian investors must agree, since Transfield hit a new all-time high on March 22 in Sydney. Like most major Australian firms, Transfield is easy to buy at U.S. brokers under its pink sheet symbol, TFFTF.PK. I consider this a "buy and forget" stock that will continue to benefit from the global expansion wave.

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Fool contributor Dale Baker, a private client portfolio manager and former U.S. diplomat with extensive experience in Europe and Africa, owns Transfield Services for himself and clients. He welcomes your questions or comments. The Motley Fool has a disclosure policy.