# Babcock International Group Plc (BAB.L) fundamentals

Data as of 2026-09-08. LSE, United Kingdom. Sector: Industrials / Construction & Engineering. Price 976p, market value 4.8 billionp.

## Valuation
- **P/E (trailing): 23.8×** (5-yr avg 1742.8×, 3-yr avg 1985.8×). Babcock International Group Plc trades at 23.8× trailing earnings, well below its own five-year average of 1742.8×: cheap by its own standards. The Industrials median in the September 2026 study was 25.7×. Forward P/E is 13.5×, lower than trailing, so analysts expect earnings to grow.
- **Price / sales: 0.5×**. Each dollar of revenue is priced at 0.5×, a low multiple typical of thin-margin businesses or out-of-favour stocks.
- **Price / book: 7.9×**. The shares trade at 7.9× book value; most of the value is in earnings power and intangibles rather than the balance sheet.
- **EV / EBITDA: 5.5×**. Enterprise value is 5.5× operating earnings before depreciation, the multiple that ignores how the company is financed; below 8× is inexpensive for most sectors.
- **Free-cash-flow yield: 9.8%** (5-yr avg 0.0%). Free cash flow equals 9.8% of the market value, above its five-year average of 0.0%, so the shares are cheaper on cash than they have usually been. Above 5% is generally attractive.
- **Earnings yield: 4.2%**. The inverse of the P/E: 4.2% of the price is earned each year.

## Profitability
- **Gross margin: 6.7%**. Babcock International Group Plc keeps 6.7% of revenue after the direct cost of what it sells, a thin margin typical of retail, distribution and commodity businesses.
- **Operating margin: 6.7%**. 6.7% of revenue is left after running the business.
- **Net margin: 4.1%**. 4.1% of each dollar of sales reaches the bottom line.
- **Return on equity: 34.4%**. 34.4% on shareholders' equity is excellent if it is not driven by leverage; sustained above 20% usually signals a competitive advantage.
- **Return on invested capital: 51.3%**. Return on all capital, debt included, is 51.3%: comfortably above what that capital costs.
- **Return on assets: 11.7%**. Each dollar of assets produces 11.7% of profit.

## Growth
- **Revenue growth (1 yr): 7.2%** (3-yr 5.3%/yr, 5-yr 5.5%/yr). Revenue grew 7.2% over the last year, against 5.5% a year compounded over five years: growth is accelerating.
- **EPS growth (1 yr): -14.6%**. Earnings per share fell 14.6%, slower than revenue, so margins compressed.
- **Free-cash-flow growth (3 yr): 22.0%/yr**. Free cash flow has compounded at 22.0% a year over three years.

## Financial health
- **Debt to equity: 1.79**. Debt is 1.79 times equity, a leveraged balance sheet that needs steady cash flow to service.
- **Net debt / EBITDA: 0.4×**. It would take 0.4 years of operating earnings to repay net borrowings, within the comfortable range.
- **Interest coverage: 5.8×**. Operating profit covers interest 5.8× over, a safe margin.
- **Current ratio: 0.80** (quick 0.71). Current liabilities exceed current assets, so the company depends on ongoing cash generation or refinancing to pay the next year's bills.
- **Altman Z-score: 2.52**. A Z-score of 2.52 is in the grey zone; not distressed, not clearly safe.
- **Piotroski F-score: 6/9**. 6 of 9 checks pass: mixed.

## Dividends
- **Dividend yield: 0.77%** (0p per share, trailing). Babcock International Group Plc yields 0.77%, a modest yield more typical of a growth-oriented payer.
- **Payout ratio: 16%** (13% of free cash flow). 16% of earnings goes out as dividends, leaving room to keep raising it.
- **Consecutive years of increases: 3**. 3 straight years of increases.
- **Shareholder yield: 4.4%**. Dividends plus net buybacks return 4.4% of the market value a year.

## Analyst view
- **Analyst consensus: strong_buy** (10 analysts). 10 analysts cover Babcock International Group Plc; the consensus is strong_buy, with an average price target of 1409p (+44% from the current price). Analyst opinion is shown for context; it is not part of the Fundamental Score.

## Price and momentum
- **Total return (1 yr): -8.4%** (YTD -19.6%, 3-mo -4.1%). The shares are down 8.4% over twelve months including dividends.
- **From 52-week high: -36.1%** (8.2% above the low). Trading 36% below its 52-week high, deep in a drawdown.
- **200-day average: below**. The price sits below its 200-day moving average, the usual definition of a downtrend.
- **RSI (14-day): 29**. An RSI of 29 is oversold; bounces are common, but oversold can stay oversold in a real decline.
- **Beta (1 yr): 1.09** (volatility 34%). Beta of 1.09 against the FTSE All-Share: the shares move roughly with the market.

Live score and charts: https://foliofundamentals.com/analyzer?s=BAB.L · Page: https://foliofundamentals.com/stocks/bab.l

Not investment advice.