Large Cap Stockholm (ATCO B)
Today, Atlas Copco announced that it is acquiring a Spanish compressor manufacturer, ABC Compressors. The acquisition is expected to be completed in the third quarter of 2025. In 2024, the company had revenues of just over 900 million Swedish kronor.
ABC Compressors was founded in 1943 and is located in Eibar, Spain, with an assembly unit in Suzhou, China and sales offices in India, the USA and Mexico. A total of 319 employees will join the Atlas Copco Group as part of the acquisition. The purchase price is not disclosed.
This is just one of many acquisitions that Atlas Copco makes every year. Companies are acquired at a high rate and they are very skilled at making these kinds of acquisitions. The new companies will join Atlas Copco and contribute with good profitability. In 2024, Atlas Copco completed 33 acquisitions that added revenues of a total of SEK 3.4 billion.
Atlas Copco is impressively skilled and runs its business capital-light and profitably. They do not tie up as much capital as other similar companies as they only manufacture the most important/sensitive components themselves and buy in a lot from third parties. On top of this efficient operation, they add more and more companies every year that contribute to the growth and profitability.
I own Atlas Copco and think it has been and is a good time to buy more shares in the company. It is a weak period right now, both for the shares, and for industrial companies operationally. For a long-term investor, it has created an opportunity to enter Atlas Copco at a lower valuation and price. When the share price will take off again, no one can say with precision. However, If Atlas Copco continues to do what they have bene doing for several decades, then the share will rise in the long run. Over the past 10 years, Atlas Copco B has had an annual average total return of 12.8 percent. The potential is there for similar performance over the next 10-20 years.
This year’s dividend is SEK 3, divided into SEK 1.5 in May and the same amount in October. At the current price of SEK 135.9, the dividend yield is 2.2 percent. Over the past 5 years, dividend growth has been 12.2 percent per year on average.
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