Note: This information is from De Aandeelhouder, source bottom of this post.
The Dutch construction sector is in the spotlight, with $BAMNB (+1,91%) and $HEIJM (+2,12%) showing impressive share price growth recently. Investors are starting to recognize the structural attractiveness of these companies. Here are the key reasons behind their surge—and why it may not be over yet:
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🔹 1. Attractive Valuations
Heijmans is trading at a P/E ratio of ~10 based on expected 2026 earnings.
BAM is even slightly cheaper.
Free cash flow is close to net profit, meaning you're effectively paying around 10 times free cash flow too.
These valuations are based on solid fundamentals, not hype.
Both companies pay a stable and growing dividend and have share buyback programs, increasing earnings per share.
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🔹 2. Resilient to Inflation
BAM and Heijmans can pass on inflation to their clients.
Their clients—mainly governments and public institutions—are willing to pay more for reliability and quality.
They maintain margins even as costs for labor and materials rise.
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🔹 3. Rising Market Capitalization
Heijmans recently surpassed €1 billion in market cap.
Higher market cap attracts institutional investors.
More liquidity = more analyst coverage = more investor interest = self-reinforcing momentum in the stock price.
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🔹 4. Structural Tailwinds in the Sector
The Netherlands is facing a chronic housing shortage.
Demand for housing, infrastructure, and energy transition projects remains strong.
Their client base (mostly governments) ensures stable revenues and low default risk.
Their supply chains are 80–90% local, reducing exposure to global disruptions (e.g., geopolitical issues, shipping delays).
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🔹 5. Complexity and Scale Favor Large Players
Construction projects are increasingly complex due to sustainability requirements and technical demands.
BAM and Heijmans have the scale, capital, and expertise to deliver on large, complex projects.
Smaller companies struggle to meet new standards.
Labor shortages actually help them: with fewer skilled workers available, they can choose the most profitable, low-risk projects, improving their margins and stability.
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🔹 6. BAM Leaves Its Troubled Past Behind
BAM has cleaned up its project portfolio and moved past legacy problems (e.g., the Afsluitdijk).
Now focusing on lower-risk, better-margin projects.
This shift boosts investor confidence.
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🔹 Conclusion: A Golden Opportunity for Investors?
BAM and Heijmans offer a rare mix of:
Low valuation
Strong free cash flow
Growing dividends
Structural demand from the housing and public investment side
Their strong market position and resilience in a tight labor market make them even more compelling.
Market momentum and reduced risk profiles suggest continued potential upside.
📌 Caution: Construction remains sensitive to interest rate movements and political decisions. But for now, both stocks still look attractive.
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Source: https://www.deaandeelhouder.nl/columns/de-logica-achter-de-opmars-van-bam-en-heijmans/ (Dutch)
