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Analysis before buying or selling Vinci shares

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Some French companies enjoy strong national popularity, but also strong recognition worldwide. This is the case of Vinci, which is also one of the largest French groups listed on the stock exchange. To find out how to analyse Vinci shares, here is some information to know before buying and selling these shares.

Latest news

Vinci share dividend and yield

31/05/2022 - 08h00

Find out the amount and yield of Vinci's stock dividend as well as other useful information including its payment dates and ten-year history.

Elements to consider before selling or buying Vinci shares

Analysis N°1

The signing of Vinci contracts in emerging markets, which represent a major source of revenue with a strong increase in demand for infrastructure over the last few years, will be followed with the utmost attention.

Analysis N°2

We will also monitor the evolution of the group's positioning in the energy segment, which is likely to increase its sources of revenue to a greater or lesser extent. Of course, this concerns more particularly the green energy sector.

Analysis N°3

We will also closely monitor the signing of Vinci public-private partnership contracts that will take place in the coming months or years, as well as partnerships of this type that are currently underway.

Analysis N°4

Of course, the price of raw materials will also have an impact on the price of this value and on Vinci's activities, so you will have to keep a close eye on this market.

Analysis N°5

Competition from Asian countries is also to be closely monitored in the building and public works sector, as is competition from large groups, particularly European groups.

Analysis N°6

We will also monitor the evolution of investment by local authorities in the execution of public works, which will have an impact on the company's profitability.

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General presentation of Vinci

The French group Vinci is none other than the world leader in construction, concessions and related services. However, its turnover is mainly generated by the design and construction of works in the building, civil engineering and hydraulic sectors with Vinci Construction. These activities account for 32.3% of the group's sales.

This is followed by the design, construction and maintenance of energy and telecoms infrastructures, and the construction, renovation and maintenance of transport infrastructures, which account for 28.6% of sales with Vinci Energie. Delegated infrastructure management generates 16.4% of revenue. Finally, the remaining 2.5% of sales came from property development activities.

Vinci achieves more than 59.6% of its turnover in France but also reaches the whole of Europe, Africa, North America and a few other countries.

Vinci's share price is currently listed on compartment A of the Euronext Paris market in France. The Vinci Group is included in the calculation of the French national stock market index CAC 40. It is therefore one of the 40 companies with the largest market capitalisation in France.

Analysis before buying or selling Vinci shares
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The major competitors of Vinci

While a good knowledge of Vinci is of course essential before buying and selling this stock, you should also know its direct sectoral environment and therefore its main competitors in its sector of activity. Here is a quick overview of the companies to follow in this context:

Bouygues 

First of all, we will of course follow the French industrial group Bouygues which was created in 1952 by Francis Bouygues and managed by his son Martin Bouygues. This group is structured into three main business areas

Eiffage

Vinci's second French competitor is the Eiffage Group which is a French construction and concessions group that was created in 1993 through the merger between Fougerolle and SAE. Currently, the group is active in various fields of public works with construction, infrastructure, concessions and energy. It is the third largest construction and concessions company in France after Vinci and Bouygues. The Eiffage Group currently employs more than 66,000 people and operates in nearly 70 countries. It carries out nearly 100,000 construction projects each year.

Hochtief Aktiengesellschaft

This German company is also specialised in the construction sector and was founded in 1874 in Frankfurt. Its headquarters are now in Essen. Hochtief specialises in bridges, tunnels, dams, ports, airports and nuclear power plants. It has subsidiaries in the Netherlands, Brazil, Argentina, Australia, Hong Kong, South Africa, the Middle East, Poland, Russia and the USA. The German RWE Group is still the main shareholder. Hochtief is one of the largest groups in this sector in the world after the French Vinci and Bouygues. It currently employs no fewer than 66,178 people and generates the majority of its turnover outside the German market, accounting for almost 80% of its sales.

Strabag SE

Vinci's European competitors include the Strabag SE group, an Austrian construction company that is included in the ATX index. Strabag is currently the largest construction company in Austria, but also one of the largest in Europe. The group operates in its home markets of Austria and Germany, but also in all countries of Central, Eastern and South-Eastern Europe. It operates on a project basis and owns and operates subsidiaries in some Western European markets, in the Arabian Peninsula and also in Canada, Chile, China and India.

Grupo ACS

The last major competitor of Vinci in the European market is Grupo ACS or Actividades de Construccion y Servicos. This Spanish construction company is included in the Spanish national stock market index Ibex 35.


The major partners of Vinci

The Vinci Group, through its various subsidiaries, has developed various partnerships with French and international companies over the years in order to maintain its place among the leaders in this field of activity.

BlablaCar

It has thus set up a partnership with the company BlablaCar in 2015 in order to develop this type of means of transport on French motorways.

Bouygues

Negotiations are currently underway between Vinci and Bouygues to set up a possible partnership on various construction projects.

Waze

More recently, the group has also set up a partnership with the Waze satellite guidance service with the aim of preventing dangers for men and women working on motorways through active prevention for motorists in real time. The partnership between these two companies was initially set up in 2015 and has been strengthened since 2018 with the deployment of a new feature that signals the presence of Vinci Autoroutes' intervention vans.

UNAF

Also in 2018, Vinci Airports has also joined the UNAF programme "Bee

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Positive factors for Vinci shares
The factors in favour of a rise in the Vinci share price:

Vinci's first asset is of course its positioning on the international market. Indeed, the group is currently and has been for several years the world leader in the building and public works sector. It stands out in particular in the motorway and airport concession segments. It should also be noted that Vinci is marked by a very strong presence outside France, with more than 41% of its sales outside France, which is relatively rare for a French company.

The Vinci company also benefits from a reassuring long-term strategy, highlighting the complementary nature of its activities. Indeed, there is a strong complementarity between the concession activities with the Vinci Autoroutes and Vinci Aéroports subsidiaries, which together account for more than 18% of the company's sales, and the contracting activities with the Vinci Energies, Eurovia and Vinci Construction subsidiaries, which generate the remaining 82% of the company's overall sales.

It is also relatively easy for investors and shareholders to have good visibility on the future results of the Vinci company. Indeed, the company usually communicates its order book with a horizon of one year of revenue, which allows correct and precise anticipations of the evolution of sales and profits.

The Vinci group also shows a very interesting capacity for growth and development. Indeed, the company often makes acquisitions, particularly of airport concessions that enable it to increase its market share in a sector that is known to generate high margins. Thanks to this judicious acquisition strategy, Vinci is today the fifth largest international player in this sector with more than 100 million passengers a year thanks to its subsidiary Vinci Airport.

In the coming years, Vinci should also benefit from the renewal of French motorway concession contracts. The investors appreciated the fact that the company was able to negotiate advantageous financial conditions for these renewals despite negative expectations.

Vinci also won the tender for the Grand Paris project, which is about to start and should enable the company to generate significant profits in France in the coming years. This offers additional visibility to investors.

Finally, in a difficult economic context for European companies, Vinci has succeeded in significantly reducing its debt. As a result, it has been awarded an A rating by the rating agencies in 2016 and offers a high return for investors.

Negative factors for Vinci shares
The factors in favour of a drop in the Vinci share price:

Of course, like any stock market asset, the Vinci share does not have only assets and can suffer from a few flaws that it is important to be aware of before engaging in online speculation. Here are the main weaknesses of this stock:

  • Firstly, although visibility is relatively good with regard to the Group's motorway concession contracts in France, in recent years there has been a downward trend in traffic mainly due to the rise in petrol prices and the decline in purchasing power in Europe. This could therefore weigh on the company's profitability in the longer term.
  • Other news also cast doubt on the company's future results, such as the uncertainties surrounding the financing of French local authorities or the delays in setting up public-private partnerships. The European States are currently undergoing major budgetary constraints, which has had harmful consequences for Vinci, as was the case with the suspension of the Bordeaux-Hendaye TGV line and the postponement of the delivery of the new Nantes airport terminal.
  • It should also be noted that, although Vinci benefits from varied and diversified activities, the margins achieved according to the divisions show rather significant variations. We know that most of the company's current profit, i.e. more than 60%, is generated by concession activities, while contracting is lagging behind. The value is therefore highly exposed to the constraints of this particular sector of activity.

It is important to analyse and compare the effects of these advantages and shortcomings of Vinci before taking a position to buy or sell this stock on the stock market.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

Who is the main shareholder of the Vinci Group?

At present, it is in fact the Vinci Group's employee savings funds that bring together more than 120,000 employees and former employees of the group that represents Vinci's largest shareholder. Indeed, these employee savings funds currently represent 9% of the group's capital in terms of shareholding, making them collectively the largest shareholder in terms of shares in the company. The rest of the shareholding can be consulted on the group's website.

What dividend policy does the Vinci Group apply?

The Vinci share offers a significant advantage with regard to the Group's dividend policy. Indeed, this policy is particularly attractive and constant and consists of distributing 50% of its consolidated net profit to shareholders. This favourable policy has been applied since 2006 and since the group's acquisition of ASF.

How has the Vinci share evolved historically?

It is interesting to know the evolution of the Vinci share price, in other words, its performance, over the last few months or the last year. Thus, over the last year, the share of this group has lost 28.12% of its value. Its high was €107.35 and its low €54.76. For the last six months to April 2020, the Vinci share has fallen by 34.40%.

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