EMCOR GROUP INC (EME) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:EME - US29084Q1004 - Common Stock
730.4 USD
+3.05 (+0.42%)
730.4 USD
0 (0%)
EME gets a fundamental rating of 8 out of 10. The analysis compared the fundamentals against 55 industry peers in the Construction & Engineering industry. EME gets an excellent profitability rating and is at the same time showing great financial health properties. EME is not priced too expensively while it is growing strongly. Keep and eye on this one! These ratings could make EME a good candidate for growth and quality investing.
1. Profitability
1.1 Basic Checks
- EME had positive earnings in the past year.
- In the past year EME had a positive cash flow from operations.
- EME had positive earnings in each of the past 5 years.
- Each year in the past 5 years EME had a positive operating cash flow.
1.2 Ratios
- Looking at the Return On Assets, with a value of 13.08%, EME belongs to the top of the industry, outperforming 85.45% of the companies in the same industry.
- EME has a Return On Equity of 33.89%. This is amongst the best in the industry. EME outperforms 85.45% of its industry peers.
- EME's Return On Invested Capital of 27.41% is amongst the best of the industry. EME outperforms 89.09% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for EME is significantly above the industry average of 15.97%.
- The last Return On Invested Capital (27.41%) for EME is above the 3 year average (21.01%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.08% | ||
| ROE | 33.89% | ||
| ROIC | 27.41% |
ROA(3y)9.99%
ROA(5y)7.93%
ROE(3y)26.83%
ROE(5y)20.8%
ROIC(3y)21.01%
ROIC(5y)17.59%
1.3 Margins
- EME has a better Profit Margin (6.96%) than 70.91% of its industry peers.
- In the last couple of years the Profit Margin of EME has grown nicely.
- The Operating Margin of EME (9.41%) is better than 69.09% of its industry peers.
- EME's Operating Margin has improved in the last couple of years.
- The Gross Margin of EME (19.39%) is comparable to the rest of the industry.
- EME's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.41% | ||
| PM (TTM) | 6.96% | ||
| GM | 19.39% |
OM growth 3Y19.88%
OM growth 5Y12.87%
PM growth 3Y21.31%
PM growth 5Y14.3%
GM growth 3Y7.78%
GM growth 5Y5.13%
2. Health
2.1 Basic Checks
- EME has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
- EME has less shares outstanding than it did 1 year ago.
- Compared to 5 years ago, EME has less shares outstanding
- EME has a better debt/assets ratio than last year.
2.2 Solvency
- EME has an Altman-Z score of 7.17. This indicates that EME is financially healthy and has little risk of bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 7.17, EME belongs to the top of the industry, outperforming 89.09% of the companies in the same industry.
- EME has a debt to FCF ratio of 0.01. This is a very positive value and a sign of high solvency as it would only need 0.01 years to pay back of all of its debts.
- With an excellent Debt to FCF ratio value of 0.01, EME belongs to the best of the industry, outperforming 96.36% of the companies in the same industry.
- EME has a Debt/Equity ratio of 0.00. This is a healthy value indicating a solid balance between debt and equity.
- EME has a Debt to Equity ratio of 0.00. This is amongst the best in the industry. EME outperforms 94.55% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.01 | ||
| Altman-Z | 7.17 |
ROIC/WACC2.61
WACC10.5%
2.3 Liquidity
- EME has a Current Ratio of 1.19. This is a normal value and indicates that EME is financially healthy and should not expect problems in meeting its short term obligations.
- Looking at the Current ratio, with a value of 1.19, EME is in line with its industry, outperforming 41.82% of the companies in the same industry.
- EME has a Quick Ratio of 1.17. This is a normal value and indicates that EME is financially healthy and should not expect problems in meeting its short term obligations.
- With a Quick ratio value of 1.17, EME perfoms like the industry average, outperforming 45.45% of the companies in the same industry.
- EME does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.19 | ||
| Quick Ratio | 1.17 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an impressive 26.31% over the past year.
- The Earnings Per Share has been growing by 30.23% on average over the past years. This is a very strong growth
- EME shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 14.11%.
- The Revenue has been growing by 9.69% on average over the past years. This is quite good.
EPS 1Y (TTM)26.31%
EPS 3Y45.04%
EPS 5Y30.23%
EPS Q2Q%13.28%
Revenue 1Y (TTM)14.11%
Revenue growth 3Y13.72%
Revenue growth 5Y9.69%
Sales Q2Q%16.35%
3.2 Future
- Based on estimates for the next years, EME will show a quite strong growth in Earnings Per Share. The EPS will grow by 12.92% on average per year.
- EME is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.16% yearly.
EPS Next Y18.26%
EPS Next 2Y14.44%
EPS Next 3Y12.92%
EPS Next 5YN/A
Revenue Next Year14.73%
Revenue Next 2Y10.5%
Revenue Next 3Y9.16%
Revenue Next 5YN/A
3.3 Evolution
- Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
- The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 29.37, the valuation of EME can be described as expensive.
- EME's Price/Earnings ratio is a bit cheaper when compared to the industry. EME is cheaper than 69.09% of the companies in the same industry.
- When comparing the Price/Earnings ratio of EME to the average of the S&P500 Index (28.39), we can say EME is valued inline with the index average.
- With a Price/Forward Earnings ratio of 25.89, EME can be considered very expensive at the moment.
- Based on the Price/Forward Earnings ratio, EME is valued a bit cheaper than the industry average as 69.09% of the companies are valued more expensively.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.72, EME is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.37 | ||
| Fwd PE | 25.89 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of EME is on the same level as its industry peers.
- 72.73% of the companies in the same industry are more expensive than EME, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.47 | ||
| EV/EBITDA | 18.77 |
4.3 Compensation for Growth
- EME's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- The excellent profitability rating of EME may justify a higher PE ratio.
- EME's earnings are expected to grow with 12.92% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.61
PEG (5Y)0.97
EPS Next 2Y14.44%
EPS Next 3Y12.92%
5. Dividend
5.1 Amount
- EME has a yearly dividend return of 0.23%, which is pretty low.
- Compared to an average industry Dividend Yield of 0.44, EME pays a better dividend. On top of this EME pays more dividend than 83.64% of the companies listed in the same industry.
- With a Dividend Yield of 0.23, EME pays less dividend than the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.23% |
5.2 History
- On average, the dividend of EME grows each year by 23.83%, which is quite nice.
- EME has paid a dividend for at least 10 years, which is a reliable track record.
- EME has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)23.83%
Div Incr Years4
Div Non Decr Years11
5.3 Sustainability
- 4.01% of the earnings are spent on dividend by EME. This is a low number and sustainable payout ratio.
- The dividend of EME is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP4.01%
EPS Next 2Y14.44%
EPS Next 3Y12.92%
EMCOR GROUP INC / EME FAQ
Can you provide the ChartMill fundamental rating for EMCOR GROUP INC?
ChartMill assigns a fundamental rating of 8 / 10 to EME.
What is the valuation status of EMCOR GROUP INC (EME) stock?
ChartMill assigns a valuation rating of 4 / 10 to EMCOR GROUP INC (EME). This can be considered as Fairly Valued.
How profitable is EMCOR GROUP INC (EME) stock?
EMCOR GROUP INC (EME) has a profitability rating of 9 / 10.
What is the financial health of EMCOR GROUP INC (EME) stock?
The financial health rating of EMCOR GROUP INC (EME) is 9 / 10.
How sustainable is the dividend of EMCOR GROUP INC (EME) stock?
The dividend rating of EMCOR GROUP INC (EME) is 6 / 10 and the dividend payout ratio is 4.01%.