Bentley Systems is a play on infrastructure spending and digitization.
A bull market is coming for infrastructure stocks
Lee Samaha (Bentley Systems): Management describes Bentley as “The Infrastructure Engineering Software Company.” It’s a description that also serves to highlight the investment case for the stock succinctly. There are three key growth drivers for the company, and the good news is they are all mainly secular” growth trends, meaning they are somewhat independent of the economy's direction.
Bentley provides software solutions that help architecture, engineering, and construction customers design, construct, and maintain projects. The word “maintain” should not be taken lightly, as construction and infrastructure projects tend to require multi-decades of maintenance.
The case for buying the stock rests on the following:
- The potential for significant global spending on infrastructure, including the $1.2 trillion infrastructure bill.
- Increasing use of digitization infrastructure construction.
- Closely connected with increased digitization is the opportunity for so-called “digital twin” technology to revolutionize a project's design, construction, and long-term maintenance.
Traditionally infrastructure projects have involved myriad contractors working on massive projects, all keeping data in physical files that are stored disparately. With digital technology, the data can be collated and used to manage projects better, eliminating costly overruns and waste. For example, consider the logistics involved in designing and constructing a high-rise building in the middle of a business city. Moreover, the creation of digital copies (twins) of physical assets allows them to be modeled digitally using real-time physical data to improve maintenance over many decades.
The benefits are significant, and Bentley Systems is the leader in its class, with plenty of growth potential over the next decade.
