Investors looking for growth chances at fair prices often use screening methods that find companies with good basic traits. The "Affordable Growth" method looks for stocks showing solid growth possibility while keeping good financial condition and profit measures, all at prices that do not seem too high. This system tries to find companies set for ongoing increase without asking investors to pay top prices for that growth possibility.
EMCOR GROUP INC (NYSE:EME) offers a strong example inside this investment structure. The company, which gives electrical and mechanical construction and facilities services for business, industry, and institutional areas, has shown traits that match well with affordable growth rules.
Growth Path
EME's growth picture is noted as especially good, getting a growth score of 7 out of 10 in ChartMill's basic review. The company has shown notable past results while keeping good future growth outlooks:
- Earnings Per Share has grown by 38.03% over the past year
- Average yearly EPS growth of 30.23% over recent years
- Revenue went up by 13.77% in the last year with 9.69% average yearly growth
- Expected future EPS growth of 12.08% each year
- Planned revenue growth of 9.08% each year
This steady growth in both past and future measures gives trust in the company's skill to keep increasing, which is key for any growth-focused investment plan. The steadiness between past results and future outlooks points to lasting instead of short-term growth.
Valuation Check
With a valuation score of 5 out of 10, EME shows what seems to be a fair starting point for growth-focused investors. The valuation numbers show a varied but mostly positive view:
- P/E ratio of 26.58 is better than industry average of 36.15
- Forward P/E of 23.12 is lower than industry average of 28.32
- Enterprise Value to EBITDA ratio is lower than 66% of industry peers
- Price/Free Cash Flow ratio is better than 68% of others
- PEG ratio points to suitable valuation when including growth
For affordable growth investors, this valuation outline is important, it hints the market has not completely valued the company's growth possibility, giving a chance for investors to take part in that growth without paying too much for it.
Financial Condition and Profit
EME does very well in financial steadiness, getting high scores of 9 out of 10 for both condition and profit. These positives give the base for lasting growth:
- Very good solvency numbers with Altman-Z score of 6.66
- Small debt load with Debt/Equity ratio of 0.08
- Good returns with ROE of 36.22% and ROIC of 27.02%
- Healthy profit margin of 7.07% that has been growing
- Steady positive earnings and cash flow over many years
These traits are especially important for growth investors because they lower the risk level while helping the company's skill to pay for future increase from inside instead of needing much outside money.
Investment Points
The mix of EME's qualities makes a picture that fits well with affordable growth goals. The company's good past growth gives proof of doing ability, while planned growth hints at continued speed. The fair valuation multiples, especially when placed next to industry others, show the market may not be fully seeing the company's quality traits. Very good financial condition lowers possible loss risk, while strong profit helps put money back into future growth projects.
For investors wanting to look into like chances, more stocks fitting affordable growth rules can be found using this screening results link. A more complete basic review of EME is in the full basic report.
Disclaimer: This article gives true details from found numbers and should not be taken as investment guidance. Investors should do their own study and think about their personal money situation before making investment choices.
