3 Hard-Hit Engineering & Construction Stocks to Buy Right Now

The engineering and construction industry has been suffering from various headwinds, including surging raw material costs, labor shortages, and deepening supply chain issues aggravated by the Russia-Ukraine war. This has led to major selloffs over the past few months. However, this industry is expected to grow significantly this year, driven by a rise in spending on construction projects.

The engineering and construction industry is preparing for a major shift toward connected construction capabilities by increasing its investments in digital. Furthermore, the Infrastructure Investment and Jobs Act should drive growth for engineering and construction companies over the long run.

Against the backdrop, it could be profitable to buy the dip in fundamentally sound engineering & construction stocks like EMCOR Group, Inc. (EME), MYR Group Inc. (MYRG), and Argan, Inc. (AGX).

EMCOR Group, Inc. (EME)

EME offers electrical and mechanical construction, industrial and energy infrastructure, and building services in the U.S. and the United Kingdom. The company provides design, installation, operation, maintenance services, premises electrical and lighting systems, fire protection and suppression systems, plumbing and high-purity piping systems, controls and filtration systems, crane and rigging, millwright services, and building services.

Last month, EME announced that its Board of Directors had authorized a new share repurchase program to repurchase up to an additional $200 million of its outstanding common stock. The company had nearly $88.70 million remaining under previous share repurchase authorizations on April 22. This new share repurchase program might strengthen the company’s shareholder value.

EME’s Board of Directors declared a regular quarterly cash dividend of $0.13 per share in the same month. The dividend was paid on April 29 to stockholders. The dividend payment regularly reflects the company’s strong capital foundation and consistent cash generation.

In the fiscal 2022 first quarter ended March 31, 2022, EME’s revenues grew 12.5% year-over-year to $2.59 billion, while revenues from the total United States operations segment increased 13% year-over-year to $2.46 billion. Its gross profit improved 3.4% from the year-ago value to $352.56 million. In addition, the company’s net periodic pension income rose 28.7% year-over-year to $1.17 million.

Analysts expect EME’s EPS to grow 7.6% year-over-year to $7.60 for its fiscal year 2022, ending December 2022. It has surpassed the consensus EPS estimates in three of the trailing four quarters. The $10.62 billion consensus revenue estimate for the ongoing year represents a 7.2% rise from the previous year. Furthermore, the company has surpassed the consensus revenue estimates in each of the trailing four quarters.

The stock has declined 20.4% year-to-date and 15.2% over the past year. It closed yesterday’s trading session at $101.37.

EME’s POWR Ratings reflect this promising outlook. It has an overall grade of B, equating to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

EME has a grade of B for Value, Stability, and Quality. Within the B-rated Industrial -Services industry, it is ranked #9 of 91 stocks.

To see additional POWR Ratings (Momentum, Growth, and Sentiment) for EME, click here.

MYR Group Inc. (MYRG)

MYRG provides electrical construction services in the U.S. and Canada. The company operates through two segments: Transmission and Distribution; and Commercial and Industrial. The Transmission and Distribution segment provides a wide range of services on electric transmission and distribution networks and substation facilities. Its Commercial and Industrial segment offers a range of services, including design, installation, and repair of industrial wiring, and installation of traffic networks, roadway, bridge, and tunnel lighting.

On May 5, MYRG announced a new share repurchase program that authorizes the company to repurchase up to $75 million of its outstanding shares of common stock. “We are committed to driving value for all MYR Group shareholders and directing capital to investments that generate strong returns. Today’s announcement reflects…

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