EMCOR's (EME) Dynalectric Unit Expands Footprint in Arizona
The Arizona branch of EMCOR Group, Inc.’s EME subsidiary company, Dynalectric, opened a new electrical service and off-site fabrication facility in Mesa, AZ that is ready to be operated.
Dynalectric Arizona provides electrical solutions to a wide range of clients that include healthcare, commercial, mission-critical and others. The newly installed facility in Mesa will widen this unit’s service capabilities across the region as well as assist in indemnifying the supply-chain risks faced by the construction industry. A team of experienced managers, craftspeople, technical specialists and automation experts have been put together at the new facility to ensure the efficient delivery of the services.
Shares of EME grew 1% during the trading session on Jul 10. The stock has gained 84.3% in the past year, outperforming the Zacks Building Products - Heavy Construction industry’s 52.4% growth.
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Growing Construction Segments
EMCOR is witnessing solid growth in its construction segments despite the challenging macro environment. This was due to the efficient management, from estimating to executing, of complex projects across diverse market sectors, trades and geographies. During first-quarter 2023, the U.S. Construction segments witnessed a quarter of solid top-line growth. This segment’s revenues increased 13.8% year over year, driven by the U.S. Electrical Construction and Facilities Services segment, which delivered revenue growth of 23.5% year over year.
EMCOR’s U.S. Electrical Construction and Facilities Services segment is witnessing historic growth levels courtesy of outstanding job site planning and execution supported by excellence in the Building Information Model and prefabrication. Also, solid demand across sectors such as network and communications, health care along with manufacturing and industrial added to its upside.
Moreover, strong penetration in high-tech manufacturing, primarily in semiconductors and the EV value chain areas along with continued demand for data centers enabled the company’s U.S. Mechanical Construction and Facilities Services segment’s growth.
However, macro uncertainties like supply-chain disruptions mainly due to the Russia-Ukraine war, inflation and increased interest expenses have impacted the company’s business in recent times. Nonetheless, Dynalectric Arizona’s opening of the facility will help the company address the supply-chain difficulties that the construction industry is currently experiencing.
Zacks Rank & Key Picks
EMCOR currently carries a Zacks Rank #3 (Hold).
Some top-ranked stocks from the Construction sector are Martin Marietta Materials, Inc. MLM, Eagle Materials Inc. EXP and Dycom Industries, Inc. DY.
Martin Marietta currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
MLM delivered a trailing four-quarter earnings surprise of 6.5%, on average. Shares of the company have rallied 31.4% in the year-to-date period. The Zacks Consensus Estimate for MLM’s 2023 sales and earnings per share indicates growth of 18.4% and 31.7%, respectively, from the previous year’s reported levels.
Eagle Materials currently sports a Zacks Rank of 1. EXP delivered a trailing four-quarter earnings surprise of 6.5%, on average. Shares of the company have rallied 37.2% in the year-to-date period.
The Zacks Consensus Estimate for EXP’s fiscal 2024 sales and earnings per share indicates growth of 2% and 8.3%, respectively, from the previous year’s reported levels.
Dycom currently sports a Zacks Rank of 1. DY delivered a trailing four-quarter earnings surprise of 153.7%, on average. Shares of the company have risen 19.9% in the year-to-date period.
The Zacks Consensus Estimate for DY’s fiscal 2024 sales and earnings per share indicates growth of 8.3% and 41%, respectively, from the previous year’s reported levels.
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