A Textbook Deep Value Setup with Dividends on Top
Why ABL Group is quietly rebuilding margins and rewarding patient investors.
The stock has already earned a spot in our Gullinbursti Dividend Portfolio, and here’s why I continue to like it – especially at today’s valuation.
With margins stabilising, dividend payouts growing, and recent weakness in the share price offering an attractive entry point, ABL Group stands out as a deep value opportunity in a sector that may be turning.
A Mispriced Margin Recovery
ABL maintains a solid pipeline of work, with a reported USD 104 million order backlog at the end of Q1 2025. While some contracts are "call-out" in nature and not always visible long-term, the backlog offers a helpful indicator that client activity remains resilient.
ABL's mid-cycle margin guidance remains unchanged at 6.5%, yet the market appears focused on near-term noise. At just 9.32 NOK per share (down nearly 6% over the past month), the stock looks increasingly mispriced given signs of underlying improvement and significant operational leverage.
The Q1 EBIT margin edged up to 3.8%, still modest but an improvement from Q4 and likely the start of a broader recovery. Management continues to optimise cost structures, especially in OWC, which recently returned to profitability, and is seeing margin consistency in Longitude and ABL Consulting, its largest segments by revenue.
Recent oil price strength should further support recovery in marine and energy consultancy demand, especially in regions like Brazil, China, and the Middle East, where ABL maintains active project exposure.
Paid to Wait: A Dividend with Real Yield
In June, ABL paid out a NOK 0.45 semi-annual dividend, translating to an ~9% annualised yield. This marks the third consecutive increase, supported by disciplined capital allocation and a scalable operating model.
With no long-term debt, moderate capital needs, and a flexible staffing structure (29% freelancers – a key strategic lever), ABL is well positioned to maintain generous distributions even in volatile markets.
Optionality from M&A and Renewables
ABL continues to supplement organic growth with selective bolt-ons. The recent integration of Proper Marine already contributed positively to margins, and Techconsult – consolidated from Q2 – brings further resource depth.
While offshore wind remains challenged in Europe, ABL is gaining traction in Asia-Pacific and has expanded its footprint in solar, hydro, and onshore wind, now representing 19% of OWC’s hours billed, up from 11% in 2023.
In the long run, this diversification may serve as a hedge against future sector-specific downturns while offering upside as energy transition spending resumes globally.
Why the Setup Looks Attractive Now
Valuation remains compelling: trades at ~4.5x EV/EBITDA, ~9x P/E, and ~15% FCFF yield for 2026e
Share price weakness contrasts with stronger oil prices and margin progress
Dividend yield of ~9.65% offers cushion and income
Margin expansion story underway, with 6.5% guidance still in place
Global footprint and agile cost base provide downside protection
M&A strategy brings synergies without excessive risk
Bottom Line: ABL Group won’t appeal to those chasing momentum, but for patient investors focused on cash flow, margin recovery, and yield, it offers a compelling case. With margins starting to firm and dividend payouts rolling in, this may be a compelling opportunity for value-focused, yield-driven portfolios.
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Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. Always conduct your own research or consult a financial advisor before making investment decisions. The author may hold positions in the mentioned securities.