Small-cap and large-cap companies receive a lot of attention from investors, but mid-cap stocks like Bilfinger SE (DB:GBF), with a market cap of €1.69B, are often out of the spotlight. Despite this, the two other categories have lagged behind the risk-adjusted returns of commonly ignored mid-cap stocks. Let’s take a look at GBF’s debt concentration and assess their financial liquidity to get an idea of their ability to fund strategic acquisitions and grow through cyclical pressures. Don’t forget that this is a general and concentrated examination of Amazon’s financial health, so you should conduct further analysis into GBF here. See our latest analysis for Bilfinger
Does GBF generate enough cash through operations?
Over the past year, GBF has maintained its debt levels at around €511.30M made up of current and long term debt. At this constant level of debt, the current cash and short-term investment levels stands at €801.00M , ready to deploy into the business. Moving onto cash from operations, its small level of operating cash flow means calculating cash-to-debt wouldn’t be too useful, though these low levels of cash means that operational efficiency is worth a look. As the purpose of this article is a high-level overview, I won’t be looking at this today, but you can examine some of GBF’s operating efficiency ratios such as ROA here.
Can GBF meet its short-term obligations with the cash in hand?
Looking at GBF’s most recent €1.36B liabilities, the company has been able to meet these commitments with a current assets level of €1.98B, leading to a 1.45x current account ratio. For Commercial Services companies, this ratio is within a sensible range since there is a bit of a cash buffer without leaving too much capital in a low-return environment.
Can GBF service its debt comfortably?
GBF’s level of debt is appropriate relative to its total equity, at 36.97%. GBF is not taking on too much debt commitment, which may be constraining for future growth. GBF’s risk around capital structure is low, and the company has the headroom and ability to raise debt should it need to in the future.
GBF’s cash flow coverage indicates it could improve its operating efficiency in order to meet demand for debt repayments should unforeseen events arise. However, the company exhibits an ability to meet its near term obligations should an adverse event occur. This is only a rough assessment of financial health, and I’m sure GBF has company-specific issues impacting its capital structure decisions. You should continue to research Bilfinger to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for GBF’s future growth? Take a look at our free research report of analyst consensus for GBF’s outlook.
- Valuation: What is GBF worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether GBF is currently mispriced by the market.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.