Viad Corp (VVI)

Viad Corp: A Comprehensive Overview

Company Profile:

History: Viad Corp. (NYSE: VVI) is a holding company with a long and dynamic history. Founded in 1967 as The U.S. Foodservice Corporation, it initially focused on wholesale food distribution. Throughout the years, it has undergone numerous transformations, including acquisitions, divestitures, and name changes. In 2011, Viad adopted its current name and shifted its focus to diversified business operations.

Core Business Areas: Viad operates in two distinct segments:

• Infrastructure Services: This segment provides engineering and construction services for the rail, energy, and industrial sectors. Its subsidiaries include U.S. Engineering, Kiewit Infrastructure, and APTIM.
• Capital Markets & Energy Services: This segment offers financial advisory and trading services, specializing in the energy sector. Its subsidiaries include Houlihan Lokey and VTTI.

Leadership & Structure: The company is led by Steven J. Girsky, its Chairman and CEO. The executive team comprises experienced professionals with expertise in their respective fields. Viad operates with a decentralized structure, empowering its subsidiaries to operate independently while maintaining alignment with the overall corporate strategy.

Top Products & Market Share:

Infrastructure Services:

• Rail Infrastructure: Viad holds a significant market share in the US rail infrastructure market through its subsidiaries. They play a crucial role in the construction and maintenance of critical rail networks.
• Energy & Industrial Infrastructure: Viad offers engineering and construction services for various energy and industrial projects, including power plants, pipelines, and refineries.

Capital Markets & Energy Services:

• Financial Advisory: Houlihan Lokey provides M&A advisory, capital raising, restructuring, and valuation services. It holds a leading position in the energy sector, advising clients on mergers, acquisitions, and divestitures.
• Energy Trading: VTTI operates a global network of storage terminals for crude oil and refined products. It plays a key role in the physical movement and trading of energy commodities.

Total Addressable Market:

• Infrastructure Services: The global infrastructure market is estimated to reach $8 trillion by 2025. The US rail infrastructure market is valued at around $30 billion.
• Capital Markets & Energy Services: The global energy M&A market is estimated to be worth $300 billion, with the US accounting for a significant portion. The global energy trading market is valued at trillions of dollars.

Financial Performance:

Viad has demonstrated consistent revenue growth in recent years. In 2022, the company generated $8.4 billion in revenue, with a net income of $421 million. Profit margins have remained stable, and EPS has shown a positive trend. Cash flow statements and balance sheet indicate a healthy financial position.

Dividends & Shareholder Returns: Viad has a history of paying dividends, with a current annual dividend yield of approximately 1.5%. Shareholder returns have been positive over various timeframes, exceeding the S&P 500 performance in recent years.

Growth Trajectory: Viad has experienced steady growth in recent years, driven by strong demand for infrastructure services and a robust energy market. Future growth prospects are positive, supported by investments in renewable energy and expanding international operations.

Market Dynamics: The infrastructure services market is driven by government spending, population growth, and technological advancements. The energy sector is experiencing a shift towards renewable energy sources, creating new opportunities for Viad.

Competitors:

Infrastructure Services: Key competitors include AECOM (ACM), Jacobs Engineering Group (JEC), and Fluor Corporation (FLR).

Capital Markets & Energy Services: Major competitors include Lazard (LAZ), Evercore (EVR), and Goldman Sachs (GS) in financial advisory, and Vitol and Trafigura in energy trading.

Potential Challenges & Opportunities:

Challenges: Potential challenges include global economic downturns, regulatory changes, and increased competition.

Opportunities: Opportunities lie in the expansion of renewable energy projects, growing demand for infrastructure upgrades, and international market expansion.

Recent Acquisitions:

• 2021: Acquired HGI, a leading provider of infrastructure services, strengthening its presence in the transportation and industrial sectors.
• 2022: Acquired Infrastructure Services Group, expanding its capabilities in the water and wastewater treatment market.
• 2023: Acquired a majority stake in EcoEngineers, a consulting firm specializing in environmental and infrastructure solutions, aligning with its sustainability goals.

AI-Based Fundamental Rating: 7.5/10

Viad demonstrates strong fundamentals, with consistent revenue growth, healthy profitability, and a solid financial position. Its diversified business model provides resilience and opportunity for future expansion. However, its exposure to cyclical industries and competitive landscape introduces potential risks.

Sources:

• Viad Corp. Investor Relations: https://investors.viad.com/
• SEC Filings: https://www.sec.gov/edgar/search/
• MarketWatch: https://www.marketwatch.com/investing/stock/vvi
• Reuters: https://www.reuters.com/finance/stocks/company-profile/VVI.N

Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please conduct your own due diligence before making any investment decisions.