EME  Emcor Group Inc.

Exchange

NYSE

Sector

Capital Goods

Industry

Engineering & Construction

Market Cap.

4.76B

Vuru Grade

43.63/100

Current Price

$80.51
-0.04 (-0.05%)

Growth Price

$46.56
Overvalued by 42.17%

Stability Price

$43.98
Overvalued by 45.37%

Company Metrics

  • P/E 24.13
  • P/S 0.61
  • P/B 2.97
  • EPS 3.34
  • Cash ROIC 11.40%
  • Cash Ratio 0.31
  • Dividend 0.32 / 0.4%
  • Avg. Vol. 321,382.00
  • Shares 59.12M
  • Market Cap. 4.76B

Company Description

EMCOR Group, Inc., together with its subsidiaries, provides electrical and mechanical construction and facilities services worldwide. It engages in the design, integration, installation, start-up, operation, and maintenance of various electrical and mechanical systems, including electric power transmission and distribution systems, such as power cables, conduits, distribution panels, transformers,... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Bessemer Group Inc. Raises Holdings in EMCOR Group, Inc. (EME)
TrueBlueTribune - Sep 12, 2017
EMCOR Group logo Bessemer Group Inc. grew its stake in EMCOR Group, Inc. (NYSE:EME) by 36.4% in the 3rd quarter, according to its most recent filing with the Securities and Exchange Commission.
EMCOR Group, Inc. Reports Third Quarter 2017 Results
Business Wire (press release) - Oct 26, 2017
BUSINESS WIRE)--EMCOR Group, Inc. (NYSE:EME) today reported results for the third quarter ended September 30, 2017. For the third quarter of 2017, net income from continuing operations attributable to EMCOR was $64.8 million, or $1.09 per diluted ...
EMCOR Group acquires Cherokee Millwright
Maryville Daily Times - Nov 2, 2017
Cherokee Millwright will operate under the umbrella of Southern Industrial Constructors, an EMCOR Group company that specializes in industrial construction and plant installation, relocation and maintenance services, but its headquarters will remain in ...
William P. Reid Elected to the EMCOR Group, Inc. Board of Directors
Business Wire (press release) - Oct 25, 2017
NORWALK, Conn.--(BUSINESS WIRE)--EMCOR Group, Inc. (NYSE: EME) today announced the election of William P. Reid to the Company's Board of Directors.
How EMCOR Group, Inc. (EME) Is Trading Compared to Moving Averages? - Post Analyst
EMCOR Group, Inc. (EME) Trading 4.3% Higher After Strong Earnings - The Ledger Gazette
EMCOR Group Inc. (EME) Breaks into New 52-Week High on November 01 Session
Equities.com - Nov 1, 2017
Shares of EMCOR Group Inc. (EME) broke into a new 52-week high yesterday, hitting a peak of $81.60. Shares closed at $80.52 after opening at $81.42 for a move of 0.01%.
EMCOR Group, Inc. (EME) Downgraded to “Sell” at Zacks Investment Research - The Ledger Gazette
Dissecting the Investment Cases for EMCOR Group, Inc. (EME) and Quanta ... - Economic News
EMCOR Group Inc. (EME) Breaks into New 52-Week High on November 06 Session
Equities.com - Nov 6, 2017
Shares of EMCOR Group Inc. (EME) broke into a new 52-week high yesterday, hitting a peak of $81.77. Shares closed at $81.49 after opening at $81.44 for a move of 0.3%.
EMCOR Group, Inc. (EME) Upgraded to “Buy” at Zacks Investment Research - The Ledger Gazette
EMCOR Group, Inc. (NYSE:EME) Issues FY17 Earnings Guidance - Dispatch Tribunal
Rothschild Asset Management Inc. Has $43.42 Million Position in EMCOR Group ...
StockNewsTimes - 16 hours ago
EMCOR Group logo Rothschild Asset Management Inc. reduced its stake in EMCOR Group, Inc. (NYSE:EME) by 0.9% in the third quarter, according to its most recent filing with the Securities and Exchange Commission.
Advisors Asset Management Inc. Has $5.36 Million Holdings in EMCOR Group, Inc ... - Dispatch Tribunal
State Treasurer State of Michigan Has $1.55 Million Position in EMCOR Group ... - Week Herald
Stifel Nicolaus Reaffirms Buy Rating for EMCOR Group, Inc. (EME)
The Ledger Gazette - Nov 20, 2017
EMCOR Group logo EMCOR Group, Inc. (NYSE:EME)'s stock had its “buy” rating restated by stock analysts at Stifel Nicolaus in a report released on Wednesday, November 1st.
Hennessy Advisors Inc. Sells 43200 Shares of EMCOR Group, Inc. (NYSE:EME) - StockNewsTimes
EMCOR Group Inc. acquires Cherokee Millwright Inc.
messenger-inquirer - Nov 5, 2017
EMCOR Group Inc. acquires Cherokee Millwright Inc. By the Associated Press; Nov 5, 2017; 0. EMCOR Group Inc. has announced that it has acquired Cherokee Millwright Inc. headquartered in Maryville, Tennessee.
EMCOR Group's (EME) CEO Tony Guzzi on Q3 2017 Results - Earnings Call Transcript
Seeking Alpha - Oct 29, 2017
Certain of the risks and factors associated with EMCOR's business are also discussed in the company's 2016 Form 10-K and in other reports filed from time to time with the Securities and Exchange Commission.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for EME to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate EME's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$80.51 Current Price

$46.56 Growth Price (DCF)

Overvalued by 42.17%


Growth Rate Assumed by Market: 19.68%


Future Free Cash Flow Growth Rate: -4.5%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$43.98 Stability Price (EPV)

Overvalued by 45.37%


Discount Rate: 15.0%

$46.07 Book Price

Overvalued by 42.78%


Satisfactory Cash Return on Invested Capital over the past 5 years

EME has somewhat efficiently invested its financial resources in buildings, projects, and equipment. If CROIC is inconsistent, it's likely EME could be benefiting from a one-time event or has a mixed history of investing capital productively. Read the company's Annual Report to determine whether this can improve.

EME has created $11.40 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 146.53M 114.57M 208.62M 231.21M 224.91M
divided by
Invested Capital 1.21B 1.73B 1.67B 1.65B 1.92B
Cash ROIC 12.14% 6.63% 12.47% 14.05% 11.73%

Satisfactory Return on Equity over the past 5 years

EME has generated adequate returns with capital that shareholders have invested. This is sufficient and implies that management performance has been good.

EME has generated $11.11 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 148.89M 127.35M 173.43M 172.51M 182.15M
divided by
Stockholders' Equity 1.35B 1.47B 1.42B 1.48B 1.54B
Return on Equity 11.06% 8.69% 12.25% 11.68% 11.85%

Excellent Business Performance over the past 10 years

EME has been able to maintain profitability in good times and bad. This could mean EME has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

EME has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow 237.52M 297.51M 335.01M 49.29M 119.84M 146.53M 114.57M 208.62M 231.21M 224.91M

Weak Balance Sheet

EME's financial position is not ideal. The key is to check whether EME is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 251.64M 405.87M 726.98M 710.84M 511.32M 605.30M 439.81M 432.06M 486.83M 464.62M
Current Assets 1.94B 2.01B 1.98B 1.98B 1.94B 2.04B 1.93B 1.89B 2.07B 2.21B
Total Assets 2.87B 3.01B 2.98B 2.76B 3.01B 3.11B 3.47B 3.39B 3.55B 3.89B
Current Liabilities 1.51B 1.51B 1.33B 1.23B 1.33B 1.29B 1.30B 1.28B 1.41B 1.51B
Total Liabilities 1.99B 1.97B 1.76B 1.60B 1.78B 1.76B 2.00B 1.97B 2.07B 2.36B
Stockholder' Equity 885.04M 1.04B 1.22B 1.15B 1.23B 1.35B 1.47B 1.42B 1.48B 1.54B
Current Ratio 1.28 1.33 1.48 1.61 1.46 1.58 1.49 1.47 1.46 1.46
TL-to-TA 0.69 0.65 0.59 0.58 0.59 0.57 0.58 0.58 0.58 0.61

Consistent Reinvestment of Profits over the past 10 years

EME has consistently retained profits. This may put EME in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, EME can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 526.31M 708.51M 869.27M 782.58M 910.04M 1.02B 1.13B 1.28B 1.43B 1.60B
Retained Earnings Growth - 34.62% 22.69% -9.97% 16.29% 12.33% 10.92% 12.97% 11.86% 11.40%

Highly Competitive Industry over the past 10 years

It's likely that EME is in an industry with low barriers to entry, spurring high competition. If Gross Margins are at least satisfactory, it's likely EME invests heavily in R&D and Sales, General & Administrative expenses.

Only $2.05 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 126.81M 182.20M 163.08M -86.69M 133.67M 148.89M 127.35M 173.43M 172.51M 182.15M
divided by
Revenue 5.93B 6.79B 5.55B 5.12B 5.61B 6.35B 6.42B 6.42B 6.72B 7.55B
Net Profit Margin 2.14% 2.69% 2.94% -1.69% 2.38% 2.35% 1.98% 2.70% 2.57% 2.41%

Inconsistent Gross Profit Margins over the past 10 years

EME has good gross profit margins, however inconsistency of these margins is a cause for concern. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$22.11 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit 702.82M 886.65M 824.90M 719.54M 5.61B 806.35M 813.06M 907.25M 944.48M 1.04B
divided by
Revenue 5.93B 6.79B 5.55B 5.12B 5.61B 6.35B 6.42B 6.42B 6.72B 7.55B
Gross Margin 11.86% 13.07% 14.87% 14.05% 100.00% 12.71% 12.67% 14.12% 14.06% 13.74%

Low Capital Intensity over the past 10 years

EME has consistently used a small portion of their Net Income buying new equipment or investing in new facilities. This indicates that EME may require minimal investment to stay competitive. This leaves them with extra money to spend on growing their business and potentially buying back stock.

21.34% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 21.50M 37.51M 24.10M 19.36M 29.58M 37.88M 35.50M 38.04M 35.46M 39.65M
divided by
Net Income 126.81M 182.20M 163.08M -86.69M 133.67M 148.89M 127.35M 173.43M 172.51M 182.15M
Capital Expenditure Ratio 16.96% 20.59% 14.78% -22.33% 22.13% 25.44% 27.87% 21.93% 20.56% 21.77%

Strong Dividend History over the past 10 years

EME has consistently distributed a dividend for the past 8 years. This suggests EME is established and will likely continue to distribute its dividend for the foreseeable future.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid - - 1.35M 2.50M 5.69M 35.67M 13.38M 26.04M 30.35M 19.45M
divided by
Shares Outstanding 66.74M 67.12M 67.45M 66.39M 68.38M 67.74M 68.08M 67.06M 63.31M 61.21M
Dividend Paid Per Share - - 0.02 0.04 0.08 0.53 0.20 0.39 0.48 0.32
Price at Year End 24.44 21.52 27.41 29.21 26.76 34.05 42.20 44.90 48.37 70.76
Dividend Yield - - 0.07% 0.13% 0.31% 1.55% 0.47% 0.86% 0.99% 0.45%

History of Stock Buybacks over the past 10 years

EME has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 66.74M 67.12M 67.45M 66.39M 68.38M 67.74M 68.08M 67.06M 63.31M 61.21M
Stock Bought Back - -0.56% -0.49% 1.58% -2.90% 0.94% -0.50% 1.51% 5.93% 3.43%
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