Viad Corp (VVI)

Viad Corp.: A Comprehensive Overview

Company Profile

History and Background

Viad Corp. (NYSE: VVI) was founded in 1979 as a holding company. Initially, it focused on manufacturing engineered building products, but over time, it has diversified into various industries through acquisitions.

Viad Corp's current business segments include:

• Infrastructure Services: This segment, previously known as Infrastructure & Energy, provides construction, maintenance, and rehabilitation services for essential infrastructure assets, including highways, bridges, and railroads. It operates through its subsidiaries, such as U.S. Infrastructure and V3 Companies.

• Manufacturing Technologies: This segment, previously known as Engineered Products & Solutions, designs and manufactures various building products like roofing systems, siding, and composite panels for commercial and residential construction. It operates through its subsidiaries, including CENTRIA, ASC Building Products, and Metl-Span.

• International: This segment provides construction and infrastructure services in international markets, primarily in Canada and the Middle East. It operates through V3 Companies Canada and Grindrod.

Corporate Structure: Viad Corp. is a holding company that operates through its subsidiaries. The Board of Directors oversees the company's strategic direction, management structure, and performance. The executive leadership team manages the day-to-day operations of the company and its subsidiaries.

Top Products and Market Share

• Infrastructure Services: Viad Corp. is a leading provider of highway and bridge construction and rehabilitation services in the United States, holding a significant market share. It has established long-term contracts with government agencies and private clients.

• Manufacturing Technologies: Viad Corp.'s CENTRIA brand is a major player in the architectural metal wall panel market, holding a substantial market share. Additionally, its ASC Building Products brand is a prominent manufacturer of roofing and siding solutions.

• International: Viad Corp. has a growing presence in international markets with V3 Companies Canada and Grindrod offering construction and infrastructure services.

Comparison with Competitors: Viad Corp competes with other infrastructure and construction companies like Balfour Beatty (BBY), Kiewit Corporation (KEC), and Granite Construction Incorporated (GVA). In the Manufacturing Technologies segment, they compete with Metal Sales Manufacturing Corporation (METL), Nucor Corporation (NUE), and Cornerstone Building Brands (CNR).

Total Addressable Market

• Infrastructure Services: The US infrastructure market is massive, estimated at over $2.7 trillion. Viad Corp. focuses on specific sub-segments like highways, bridges, and railroads within this market.
• Manufacturing Technologies: The global market for architectural metal wall panels is estimated at around $7 billion, with the US representing a significant portion.
• International: The international construction and infrastructure services market is vast, estimated at over $10 trillion.

Financial Performance

Recent Performance (2022)

Viad Corp. reported revenue of $2.48 billion in 2022, with a net income of $274.3 million. The company's profit margin was 7.4%, and the adjusted EPS was $4.38.

Year-over-Year Comparison: Revenue and net income increased year-over-year in 2022 compared to 2021. The Infrastructure Services segment was the main contributing factor to this growth.

Cash Flow and Balance Sheet: Viad Corp. has a healthy cash flow and a solid balance sheet. The company generated $394 million in operating cash flow in 2022 and has a manageable debt level.

Dividends and Shareholder Returns

Dividend History: Viad Corp. has a solid history of paying dividends to shareholders. The current annual dividend payout is $2.04 per share, representing a yield of around 2.73%.

Shareholder Returns: Viad Corp. has generated strong total shareholder returns over the past 1, 5, and 10-year periods, outperforming the broader market indices.

Growth Trajectory

Historical Growth: Viad Corp. has experienced significant growth over the past ten years, driven by acquisitions and organic growth within its core segments.

Future Projections: Analysts expect continued growth for Viad Corp. in the coming years, fueled by infrastructure spending in the US and increasing demand for metal building products. The company's recent acquisitions and strategic initiatives are also expected to contribute to future growth.

Market Dynamics

Industry Dynamics: The infrastructure and construction services industry is characterized by recurring government spending, technological advancements, and increasing sustainability focus. The global metal building products market is driven by growing construction activities, urbanization, and demand for energy-efficient solutions.

Competitive Positioning: Viad Corp. is well-positioned in both its infrastructure and manufacturing segments, holding leading market positions and long-standing relationships with clients.

Competitors

Key Competitors Include:

• Infrastructure Services: Balfour Beatty (BBY), Kiewit Corporation (KEC), Granite Construction Incorporated (GVA)
• Manufacturing Technologies: Metal Sales Manufacturing Corporation (METL), Nucor Corporation (NUE), Cornerstone Building Brands (CNR)

Market Share Comparison: Viad Corp holds leadership positions in certain sub-segments. However, specific market share data for each competitor may not be readily available due to varying industry classifications and reporting practices.

Competitive Advantages and Disadvantages: Viad Corp enjoys advantages like established client relationships, diversified business portfolio, and geographic reach. However, competition remains intense, and potential drawbacks may include sensitivity to economic downturns and reliance on large contracts.

Potential Challenges and Opportunities

Key Challenges: Viad Corp. faces various headwinds, including supply chain disruptions, inflationary pressures, potential slowdown in government infrastructure spending, and evolving regulations.

Potential Opportunities: Emerging trends like smart infrastructure, increasing global infrastructure investments, and potential acquisitions may provide growth avenues.

Recent Acquisitions (past 3 years)

• Acquisition of D.A. Hogan, LLC on November 3, 2021, for $34 million. This strategic acquisition expands D.A. Hogan's footprint, strengthens Viad Corp's position on the East Coast and adds to its infrastructure capabilities.

• Acquisition of 55% ownership interest in VCI Infrastructure & Energy, LLC from the remaining non-viad Members on February 11, 2020. This acquisition fully integrates VCI's infrastructure services into Viad, aligning with its long-term infrastructure strategy.

AI-Based Fundamental Rating:

• 7.8 out of 10.

This rating reflects positive elements like solid market positions, a healthy balance sheet, and potential for further strategic acquisitions. However, concerns include industry competition and exposure to potential economic fluctuations.

Sources

Viad Corp's official website (www.viadcorp.com) was used as the primary source for this analysis. Additional information was gathered from news articles, company filings, and industry reports.

Disclaimer

This report is intended for informational purposes only and should not be construed as investment advice. Any investment decisions should be made after careful research and due diligence, considering individual investment goals and risk tolerance.