Analysis of Bilfinger

Company: Bilfinger SE

Business: A German engineering and services group that offers customized services for industrial facilities, power plants, real estate and infrastructure which are also more or less what they are divided into as four core segments: Industrial (blueprints/design, building as well as running/servicing the industrial plants), Power (main focus lies with the maintenance of all kind of power plants), Building & Facility (biggest builder of private as well as commercial real estate in Germany) and finally Construction  (tunnels, bridges and roads).

Active: The big bulk of their activity is in Germany and Europe. Due to their engineering services and maintenance contracts they are present all over the world.

P/E: 13.7

The P/E is a little bit too high for me with 13.7 and the P/B is far to high with 1.9 which gives us that it is just outside of what Graham would have found acceptable. They have an earnings to sales of 3% which I find low but they ROE is not completely bad with 13.6%. The book to debt is only so, so with a ratio of 0.4. In the last five years they have had a yearly negative growth of -2.7% which is bad (however the last three years they have been increasing their revenue). The motivated P/E for Bilfinger becomes around 9 to 12 which means that the company is pretty much fairly valued on the market today. They pay an acceptable dividend of 3.7% which represents 50% of their earnings so they should be able to keep that up without too much hassle.

Conclusion: An interesting German service and engineering company that are currently ok valued on the market which means that it is of no interest to me today.

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