Quick Facts
- Bilfinger is an industrial services company based in Germany, dealing with process industrials
- We recently added Bilfinger shares to the Europe Value Wikifolio
Pros
- All-green Obermatt ranks, 360° View at an astounding 98 ✔
- Earnings surpassing expectations ✔
- A wide portfolio of services that improve their clients’ sustainability and efficiency with very interesting and advanced use cases ✔
- Sustainable production chain on their end ✔
Cons
- Dependence on the strength of the industrial sector ❌
- Recent stock price gains ❌
Our Europe Value Wikifolio received an interesting update: Bilfinger, one of the biggest European industrial services companies based in Germany, was added to the portfolio. Bilfinger offers construction, assembly, maintenance, repair and overhaul of industrial plants as well as engineering and consulting services. With good ranks, recent performance and a diversified palette of services with commitment to sustainability, we believe it’s a good addition to the Wikifolio.
All-green Obermatt ranks back our investment decision. Bilfinger held a high 360° View position of more than 95 for quite some time already, which basically implies that all of its performance indicators, as well as estimates are stronger than most of its European competitors.
The latest full year report backs the story that our ranks speak. Bilfinger’s earnings for 2023 surpassed all expectations and estimates. This is also reflected in the stock price, though, and it has risen more than 8% over the past couple of weeks. Our Value rank already shows this, as we have recorded its fall from 78 to 73 in just one week, but Bilfinger is still fairly priced.
Bilfinger’s array of services help clients in the process industry, such as those in energy, chemicals & petrochemicals, pharma & biopharma and oil & gas, to improve the efficiency and sustainability of their operations. The company is a one-stop shop in a way, since they offer a portfolio of services that covers the entire value chain, from consulting and engineering to manufacturing, assembly, maintenance, plant expansion and turnarounds. On top of this, they are also incorporating sustainable practices into their own operations chain, which ticks a plus on our side.
Putting good ESG parameters on the side but also to work, one of the recent news articles on Bilfinger drew our attention: their engineering is helping build a sustainable soy processing plant in the Saudi desert, which was unthinkable just a few years back. Implemented technologies allow the solar energy to produce steam for the production process and electricity at the same time. Scarce water supply is an issue that has been overcome with a new and clean recycling process that uses less chemicals. In addition, Bilfinger has received a major order in the offshore wind energy sector and will construct the foundations for two offshore wind turbines in the North Sea for the client.
Despite the positive developments, Bilfinger is in a cyclical business that is dependent on investments in the industrial sector. The company is also in competition with some large and strong companies. The share price has grown recently on positive financial news, but we still find the company an exciting investment.
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