Five high-tech construction stocks
Byggfakta (Stockholm: BFG) is one of the leading providers of software to the construction industry, covering everything from tendering to design and project management. It has around 47,000 customers managing 1.2 million projects via its various subsidiaries. These divisions include NBS, which is its largest part by revenue. Over the last few years it has experienced rapid growth. Much of this is down to acquisitions, but the organic growth of its various businesses is also strong at over 10% a year. It trades on 24 times the analysts’ consensus forecasts for 2023 earnings.
Trimble (Nasdaq: TRMB) provides project-management software that allows people to collaborate in the design, building and operation of projects. The software has over one million users and is employed in a range of industries, including agriculture and transport, but building and infrastructure accounts for the largest portion of sales, providing around 35% of revenue. Over the past five years it has experienced solid sales growth of around 6% a year, while managing to produce a return on capital employed of 10%. The shares trade on 22 times forecast 2023 earnings.
Autodesk (Nasdaq: ADSK) makes design software for the architecture, engineering and construction, manufacturing and entertainment industries. Architecture, engineering and construction accounts for just under half (44%) of revenue and customers. The firm recently made a major investment in augmented and virtual reality by acquiring The Wild, a cloud-connected, extended reality (XR) platform that lets architecture, engineering and construction professionals collaborate and review projects together. The shares trade at 31 times forecast 2023 earnings, but note that that revenue has more than doubled between 2017 and 2022, and is expected to keep growing around 15% a year.
Eleco (Aim: ELCO) was originally a construction company with a software division before reorganising to focus on software for the construction industry. Its software covers everything from planning through to construction, site management and building maintenance, and is currently used in some form by 90 out of the 100 top construction companies in the UK. The company hopes to grow its Asian business over the next few years and to move to a subscription-based model. It’s trading at 32 times 2023 forecast earnings, but growth of just under 10% a year means that this doesn’t look too expensive.
The most obvious way to invest in the use of exoskeletons in construction is through Ekso Bionics (Nasdaq: EKSO). At present, Ekso gets most of its revenue from medical exoskeletons, but with sales of its industrial exoskeletons growing by 83% year on year, it thinks that within the next few years this segment (of which construction is the biggest part) will become the most important part of the company. Be aware that this is a much higher-risk investment: Ekso has a market capitalisation of just $35m and has yet to turn a profit, although revenue is growing and it has plenty of cash on hand after a $40m fundraising in February 2021.