VCISF - Vinci: Deleveraging Nicely On Top Of Its 4% Dividend Yield

2024-04-17 11:10:21 ET

Summary

• Vinci SA manages to pay a decent dividend yield of 4% while deleveraging.
• The recovery in traffic, particularly at airports, should continue into FY 2024 due to base effects, and the rate of deleveraging should continue to improve.
• EPC economics should see margin lift as cohorts of projects reach their tail end from major order intake last year.
• Overall, Vinci SA stock offers decent absolute multiples, great relative multiple, a good income proposition, and a quite straightforward return lever.

Vinci SA ( VCISF , VCISY ), which we covered last year during its ongoing recovery from the COVID-19 hit to its airport concessions, continues to make dramatic improvements thanks to passenger recovery and margin lift in its construction businesses. Order intake continues to grow within the energy, Cobra and the construction businesses. With EPC economics being an important factor in those segments, we should see some tail-end margin uplift as these projects become delivered. Financial costs are, of course, going up, but net income growth is still coming in, and more importantly, the company is deleveraging at a decent pace even with the current dividend, which is what we see as the main mode of return here....

For further details see: