EME  Emcor Group Inc.

Exchange

NYSE

Sector

Capital Goods

Industry

Engineering & Construction

Market Cap.

4.76B

Vuru Grade

46.12/100

Current Price

$80.51
-0.04 (-0.05%)

Growth Price

$72.15
Overvalued by 10.38%

Stability Price

$47.67
Overvalued by 40.79%

Company Metrics

  • P/E 24.13
  • P/S 0.61
  • P/B 2.97
  • EPS 3.34
  • Cash ROIC 12.56%
  • Cash Ratio 0.28
  • 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

There is no news available at this time.
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

$72.15 Growth Price (DCF)

Overvalued by 10.38%


Growth Rate Assumed by Market: 9.26%


Future Free Cash Flow Growth Rate: 4.9%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$47.67 Stability Price (EPV)

Overvalued by 40.79%


Discount Rate: 15.0%

$51.57 Book Price

Overvalued by 35.94%


Growing Cash Return on Invested Capital over the past 5 years

EME has continued to efficiently invest its financial resources in buildings, projects, and equipment, resulting in increasingly stronger returns. Look at its Annual Reports to determine future sustainability.

EME has created $12.56 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20132014201520162017
Free Cash Flow 114.57M 208.62M 231.21M 224.91M 331.45M
divided by
Invested Capital 1.73B 1.67B 1.65B 1.92B 1.85B
Cash ROIC 6.63% 12.47% 14.05% 11.73% 17.94%

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 $11.61 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20132014201520162017
Net Income 127.35M 173.43M 172.51M 182.15M 227.19M
divided by
Stockholders' Equity 1.47B 1.42B 1.48B 1.54B 1.67B
Return on Equity 8.69% 12.25% 11.68% 11.85% 13.58%

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
2008200920102011201220132014201520162017
Free Cash Flow 297.51M 335.01M 49.29M 119.84M 146.53M 114.57M 208.62M 231.21M 224.91M 331.45M

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
2008200920102011201220132014201520162017
Cash 405.87M 726.98M 710.84M 511.32M 605.30M 439.81M 432.06M 486.83M 464.62M 467.43M
Current Assets 2.01B 1.98B 1.98B 1.94B 2.04B 1.93B 1.89B 2.07B 2.21B 2.28B
Total Assets 3.01B 2.98B 2.76B 3.01B 3.11B 3.47B 3.39B 3.55B 3.89B 3.97B
Current Liabilities 1.51B 1.33B 1.23B 1.33B 1.29B 1.30B 1.28B 1.41B 1.51B 1.65B
Total Liabilities 1.97B 1.76B 1.60B 1.78B 1.76B 2.00B 1.97B 2.07B 2.36B 2.29B
Stockholder' Equity 1.04B 1.22B 1.15B 1.23B 1.35B 1.47B 1.42B 1.48B 1.54B 1.67B
Current Ratio 1.33 1.48 1.61 1.46 1.58 1.49 1.47 1.46 1.46 1.38
TL-to-TA 0.65 0.59 0.58 0.59 0.57 0.58 0.58 0.58 0.61 0.58

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
2008200920102011201220132014201520162017
Retained Earnings 708.51M 869.27M 782.58M 910.04M 1.02B 1.13B 1.28B 1.43B 1.60B 1.80B
Retained Earnings Growth - 22.69% -9.97% 16.29% 12.33% 10.92% 12.97% 11.86% 11.40% 12.55%

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 $2.13 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2008200920102011201220132014201520162017
Net Income 182.20M 163.08M -86.69M 133.67M 148.89M 127.35M 173.43M 172.51M 182.15M 227.19M
divided by
Revenue 6.79B 5.55B 5.12B 5.61B 6.35B 6.42B 6.42B 6.72B 7.55B 7.69B
Net Profit Margin 2.69% 2.94% -1.69% 2.38% 2.35% 1.98% 2.70% 2.57% 2.41% 2.96%

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.

$22.42 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
2008200920102011201220132014201520162017
Gross Profit 886.65M 824.90M 719.54M 5.61B 806.35M 813.06M 907.25M 944.48M 1.04B 1.15B
divided by
Revenue 6.79B 5.55B 5.12B 5.61B 6.35B 6.42B 6.42B 6.72B 7.55B 7.69B
Gross Margin 13.07% 14.87% 14.05% 100.00% 12.71% 12.67% 14.12% 14.06% 13.74% 14.92%

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.

21.15% 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
2008200920102011201220132014201520162017
Capital Expenditure 37.51M 24.10M 19.36M 29.58M 37.88M 35.50M 38.04M 35.46M 39.65M 34.68M
divided by
Net Income 182.20M 163.08M -86.69M 133.67M 148.89M 127.35M 173.43M 172.51M 182.15M 227.19M
Capital Expenditure Ratio 20.59% 14.78% -22.33% 22.13% 25.44% 27.87% 21.93% 20.56% 21.77% 15.27%

Strong Dividend History over the past 10 years

EME has consistently distributed a dividend for the past 9 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
2008200920102011201220132014201520162017
Dividend Paid - 1.35M 2.50M 5.69M 35.67M 13.38M 26.04M 30.35M 19.45M 18.97M
divided by
Shares Outstanding 67.12M 67.45M 66.39M 68.38M 67.74M 68.08M 67.06M 63.31M 61.21M 59.62M
Dividend Paid Per Share - 0.02 0.04 0.08 0.53 0.20 0.39 0.48 0.32 0.32
Price at Year End 21.52 27.41 29.21 26.76 34.05 42.20 44.90 48.37 70.76 64.51
Dividend Yield - 0.07% 0.13% 0.31% 1.55% 0.47% 0.86% 0.99% 0.45% 0.49%

Strong History of Stock Buybacks over the past 10 years

EME has a strong 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
2008200920102011201220132014201520162017
Shares Outstanding 67.12M 67.45M 66.39M 68.38M 67.74M 68.08M 67.06M 63.31M 61.21M 59.62M
Stock Bought Back - -0.49% 1.58% -2.90% 0.94% -0.50% 1.51% 5.93% 3.43% 2.66%
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