DB:BIH

Stock Analysis Report

Executive Summary

Balfour Beatty plc finances, designs, develops, builds, and maintains infrastructure in the United Kingdom, the United States, and internationally.

Rewards

PE ratio (17.9x) is below the German market (21.1x)

Earnings are forecast to grow 8.85% per year

Risk Analysis

Debt is not well covered by operating cash flow

Unstable dividend track record

Highly volatile share price over past 3 months

Large one-off items impacting financial results

+ 1 more risk


Snowflake Analysis

Mediocre balance sheet second-rate dividend payer.


Similar Companies

Share Price & News

How has Balfour Beatty's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: BIH's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

8.1%

BIH

4.3%

DE Construction

1.7%

DE Market


1 Year Return

5.6%

BIH

-14.6%

DE Construction

15.0%

DE Market

Return vs Industry: BIH exceeded the German Construction industry which returned -14.6% over the past year.

Return vs Market: BIH underperformed the German Market which returned 15% over the past year.


Shareholder returns

BIHIndustryMarket
7 Day8.1%4.3%1.7%
30 Day11.1%-1.6%1.4%
90 Day27.2%1.4%3.3%
1 Year8.1%5.6%-11.0%-14.6%18.5%15.0%
3 Year11.2%6.0%-12.4%-18.9%17.1%6.9%
5 Year8.3%2.9%78.1%58.1%24.3%7.3%

Price Volatility Vs. Market

How volatile is Balfour Beatty's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Balfour Beatty undervalued compared to its fair value and its price relative to the market?

17.93x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: BIH (€3.38) is trading above our estimate of fair value (€2.85)

Significantly Below Fair Value: BIH is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: BIH is poor value based on its PE Ratio (17.9x) compared to the Construction industry average (12.3x).

PE vs Market: BIH is good value based on its PE Ratio (17.9x) compared to the German market (21.1x).


Price to Earnings Growth Ratio

PEG Ratio: BIH is poor value based on its PEG Ratio (2x)


Price to Book Ratio

PB vs Industry: BIH is overvalued based on its PB Ratio (1.7x) compared to the XE Construction industry average (1.2x).


Next Steps

Future Growth

How is Balfour Beatty forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

8.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: BIH's forecast earnings growth (8.8% per year) is above the savings rate (-0.4%).

Earnings vs Market: BIH's earnings (8.8% per year) are forecast to grow slower than the German market (13.2% per year).

High Growth Earnings: BIH's earnings are forecast to grow, but not significantly.

Revenue vs Market: BIH's revenue (3.2% per year) is forecast to grow slower than the German market (5% per year).

High Growth Revenue: BIH's revenue (3.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: BIH's Return on Equity is forecast to be low in 3 years time (14.4%).


Next Steps

Past Performance

How has Balfour Beatty performed over the past 5 years?

68.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: BIH has a large one-off gain of £34.0M impacting its June 28 2019 financial results.

Growing Profit Margin: BIH's current net profit margins (1.6%) are lower than last year (3.3%).


Past Earnings Growth Analysis

Earnings Trend: BIH has become profitable over the past 5 years, growing earnings by 68.4% per year.

Accelerating Growth: BIH's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: BIH had negative earnings growth (-48.3%) over the past year, making it difficult to compare to the Construction industry average (5.6%).


Return on Equity

High ROE: BIH's Return on Equity (9.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Balfour Beatty's financial position?


Financial Position Analysis

Short Term Liabilities: BIH's short term assets (£2.1B) do not cover its short term liabilities (£2.3B).

Long Term Liabilities: BIH's short term assets (£2.1B) exceed its long term liabilities (£1.3B).


Debt to Equity History and Analysis

Debt Level: BIH's debt to equity ratio (63%) is considered high.

Reducing Debt: BIH's debt to equity ratio has reduced from 123.7% to 63% over the past 5 years.


Balance Sheet

Inventory Level: BIH has a low level of unsold assets or inventory.

Debt Coverage by Assets: BIH's debt is covered by short term assets (assets are 2.8x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: BIH is profitable, therefore cash runway is not a concern.

Forecast Cash Runway: BIH is profitable, therefore cash runway is not a concern.


Next Steps

Dividend

What is Balfour Beatty's current dividend yield, its reliability and sustainability?

1.64%

Current Dividend Yield


Dividend Yield vs Market

company1.6%marketbottom25%1.3%markettop25%3.6%industryaverage3.5%forecastin3Years2.8%

Current dividend yield vs market & industry

Notable Dividend: BIH's dividend (1.64%) is higher than the bottom 25% of dividend payers in the German market (1.32%).

High Dividend: BIH's dividend (1.64%) is low compared to the top 25% of dividend payers in the German market (3.59%).


Stability and Growth of Payments

Stable Dividend: BIH's dividend payments have been volatile in the past 10 years.

Growing Dividend: BIH's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (32.4%), BIH's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: BIH's dividends in 3 years are forecast to be well covered by earnings (31.6% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.7yrs

Average management tenure


CEO

Leo Quinn (62yo)

5.1yrs

Tenure

UK£4,341,480

Compensation

Mr. Leo M. Quinn, MSc, BSc (Hons) has been the Chief Executive Officer of Balfour Beatty plc since January 1, 2015. Mr. Quinn served as the Chief Executive Officer of QinetiQ Group Plc from November 16, 20 ...


CEO Compensation Analysis

Compensation vs Market: Leo's total compensation ($USD5.66M) is above average for companies of similar size in the German market ($USD2.02M).

Compensation vs Earnings: Leo's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Leo Quinn
Group Chief Executive & Executive Director5.1yrsUK£4.34m0.28% £6.8m
Philip Harrison
CFO & Executive Director4.7yrsUK£1.33m0.040% £956.3k
William Weir
Honorary President16.8yrsUK£63.58kno data
John Tarpey
Chief of Organization Development0yrsno datano data
Chris Johnson
Chief Technology Officer0.2yrsno datano data
Louise McCulloch
Group Head of Communications1.3yrsno datano data
Paul Raby
Human Resources Director15.1yrsno datano data
Neil Patterson
Regional Managing Director of London and South East for UK Construction Business0yrsno datano data
Stephen Tarr
Managing Director of Major Projects4.5yrsno datano data
Dean Banks
Chief Executive Officer of UK Construction Services4.7yrsno datano data

4.7yrs

Average Tenure

62yo

Average Age

Experienced Management: BIH's management team is considered experienced (4.7 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Leo Quinn
Group Chief Executive & Executive Director5.1yrsUK£4.34m0.28% £6.8m
Philip Harrison
CFO & Executive Director4.7yrsUK£1.33m0.040% £956.3k
Philip Aiken
Non-Executive Chairman4.9yrsUK£273.50k0.0022% £52.8k
Stephen Billingham
Senior Independent Director0.8yrsUK£73.25k0.0035% £83.9k
Stuart Doughty
Non-Executive Director4.8yrsUK£73.25k0.00066% £15.9k
Barbara Moorhouse
Non-Executive Director2.7yrsUK£60.75k0.00058% £14.0k
Mark Layman
Director of Balfour Beatty Construction Services US6.2yrsno datano data
Michael Lucki
Non-Executive Director2.6yrsUK£68.25kno data
Anne Drinkwater
Non-Executive Director1.2yrsUK£5.13kno data

4.7yrs

Average Tenure

62.5yo

Average Age

Experienced Board: BIH's board of directors are considered experienced (4.7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Balfour Beatty plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Balfour Beatty plc
  • Ticker: BIH
  • Exchange: DB
  • Founded: 1909
  • Industry: Construction and Engineering
  • Sector: Capital Goods
  • Market Cap: UK£2.007b
  • Listing Market Cap: UK£2.412b
  • Shares outstanding: 684.22m
  • Website: https://www.balfourbeatty.com

Number of Employees


Location

  • Balfour Beatty plc
  • 5 Churchill Place
  • Canary Wharf
  • London
  • Greater London
  • E14 5HU
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
BIHDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
BBYLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
BAFB.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
BBYLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992
BBYBLSE (London Stock Exchange)10.75P GROSS(NET PD)CUM CNV RED PRF 1PGBGBPJan 1995
BAFY.YOTCPK (Pink Sheets LLC)SPONSORED ADR REUSUSDJul 2012

Biography

Balfour Beatty plc finances, designs, develops, builds, and maintains infrastructure in the United Kingdom, the United States, and internationally. It operates through Construction Services, Support Services, and Infrastructure Investments segments. The Construction Services segment provides civil engineering, building, ground engineering, mechanical and electrical installation, refurbishment and fit-out, and rail engineering services. The Support Services segment designs, upgrades, manages, and maintains water, gas, and electricity networks; and undertakes highways network management, operation, and maintenance works, as well as provides rail technology and rail renewal services. The Infrastructure Investments segment engages in the acquisition, operation, and disposal of infrastructure assets, such as roads, hospitals, student accommodation, military housing, offshore transmission networks, waste and biomass, and other concessions. This segment also develops and finances public and private infrastructure projects. Balfour Beatty plc was founded in 1909 and is based in London, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/15 20:36
End of Day Share Price2020/02/14 00:00
Earnings2019/06/28
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.