On March 21,
EMCOR Group, Inc.
) hit a new 52-week high of $47.81 per share. The momentum in the
share price was driven by the company's strong fundamentals and
recent contract wins. The stock has been on uptrend,
gaining more than 6% since it reported strong fourth-quarter 2013
earnings results on Feb 25.
In the past week, EMCOR was awarded a couple of lucrative
contracts. Its subsidiary, F&G Mechanical Corp won a contract
for Marbella II Development project in New Jersey on March 18. As
per the deal, the company will install the plumbing and fire
protection systems at an upcoming luxury apartment.
Prior to this, on March 17, EMCOR's Poole & Kent Company
received a contract from Miami Dade County for constructing one
of the Master Pump Stations to expand sewer system capacity in
key regions of Florida.
EMCOR has been consistently focused on streamlining its
business through measures like the exit from the U.K.
construction market while simultaneously strengthening its core
businesses. The company has also been gaining significantly from
increasing investments in oil and gas infrastructure like the
ongoing revamping of the petrochemical refineries in the Gulf
Moreover, the company is reaping benefits from the successful
integration of RepconStrickland, the leading industrial and
refinery service company that EMCOR acquired in July 2013.
The company had reported robust fourth-quarter 2013 results
with adjusted earnings of 76 cents per share surpassing the Zacks
Consensus Estimate by 8.6% and year ago earnings by 1.3%. The
earnings growth was driven by the company's diversified business
and robust performance of its U.S. electrical construction
segment. Its building services business also improved
significantly in the quarter.
Moreover, on Jan 13, 2014, the company raised its quarterly
dividend by 33% to 32 cents (or $1.28 annually) in its effort to
share more profit with its shareholders. Based on the closing
share price of $47.55 on Mar 21, 2014, the new dividend implies a
yield of 0.67%.
The Zacks Consensus Estimate for 2014 nudged up 0.4% to $2.59
as there has been an upward estimate revision in the last 30
days. The Zacks Consensus Estimate for 2014 is currently pegged
at $2.59 per share, reflecting a year over year growth of 16.67%
while fiscal 2015 is estimated to be $2.98 per share, translating
to year-over year-growth of 14.86%.
The company's commitment toward improving its performance
while increasing shareholders' return reflects its free cash flow
generating capability, sound liquidity position and better
prospects. Looking ahead, the company remains confident of its
growth potential, suggesting enhanced value for shareholders. The
expected long-term earnings growth rate for the stock is
Chicago Bridge & Iron Company N.V.
), which operates in the same industry also achieved a new
52-week high of $87.08 on March 18 on the back of continuous
EMCOR currently has a Zacks Rank #3 (Hold). Investors
interested in this sector could consider better-ranked stocks
India Globalization Capital, Inc.
), both of which have a Zacks Rank #2 (Buy).
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