EMCOR currently trades at $454.41 and has been a dream stock for shareholders. It’s returned 424% since January 2020, blowing past the S&P 500’s 81.9% gain. The company has also beaten the index over the past six months as its stock price is up 22.5% thanks to its solid quarterly results.

Following the strength, is EME a buy right now? Or is the market overestimating its value? Find out in our full research report, it’s free.

Why Is EMCOR a Good Business?

Through its network of over 70 subsidiaries, EMCOR (NYSE: EME) provides electrical, mechanical, and building construction and services

1. Long-Term Revenue Growth Shows Strong Momentum

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years. Luckily, EMCOR’s sales grew at a solid 9.6% compounded annual growth rate over the last five years. Its growth surpassed the average industrials company and shows its offerings resonate with customers.

2. Outstanding Long-Term EPS Growth

Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.

EMCOR’s EPS grew at an astounding 28.7% compounded annual growth rate over the last five years, higher than its 9.6% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

3. New Investments Bear Fruit as ROIC Jumps

A company’s ROIC, or return on invested capital, shows how much operating profit it makes compared to the money it has raised (debt and equity).

We typically prefer to invest in companies with high returns because it means they have viable business models, but the trend in a company’s ROIC is often what surprises the market and moves the stock price. EMCOR’s ROIC has increased significantly over the last few years. This is a great sign when paired with its already strong returns. It could suggest its competitive advantage or profitable growth opportunities are expanding.

Final Judgment

These are just a few reasons why we think EMCOR is one of the best industrials companies out there, and with its shares topping the market in recent months, the stock trades at 58.4× forward EV-to-EBITDA (or $454.41 per share). Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.

Stocks We Like Even More Than EMCOR

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