Over the last six months, EMCOR shares have sunk to $379, producing a disappointing 12% loss - worse than the S&P 500’s 1.4% drop. This might have investors contemplating their next move.

Given the weaker price action, is now the time to buy EME? Find out in our full research report, it’s free.

Why Is EME 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

A company’s long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Luckily, EMCOR’s sales grew at a solid 9.7% compounded annual growth rate over the last five years. Its growth beat 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 30.2% compounded annual growth rate over the last five years, higher than its 9.7% 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

ROIC, or return on invested capital, is a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Over the last few years, EMCOR’s ROIC has increased significantly. 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 EMCOR ranks highly on our list. After the recent drawdown, the stock trades at 16.3× forward price-to-earnings (or $379 per share). Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.

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