EMCOR GROUP INC (NYSE:EME): A Prime GARP Candidate for Low-Cost Growth

Investors looking for growth openings often face the task of balancing enlargement possibility with fair cost. The Growth At Reasonable Price (GARP) method handles this by aiming at companies showing solid growth paths while keeping rational valuations. This system steers clear of both costly momentum stocks and heavily reduced value traps, concentrating rather on businesses having lasting enlargement drivers and basically healthy financials. One candidate appearing from this filtering process is EMCOR GROUP INC (NYSE:EME), which offers a strong case for low-cost growth investment review.

Growth Path Study

EMCOR's growth outline shows the necessary enlargement traits that GARP investors usually look for. The company has set a history of steady revenue and earnings growth, which creates the base for lasting shareholder gains. Recent results show significant speed across main financial markers:

• Earnings Per Share has increased by 26.31% over the last year, with a three-year average increase rate of 30.23%
• Revenue rose by 14.11% in the most recent year, keeping a firm 9.69% average increase over several years
• Future estimates point to continued enlargement with projected EPS growth of 12.63% and revenue growth of 9.09% each year

This even growth outline, joining solid past results with fair future outlooks, places EME as having lasting instead of speculative growth traits. The steadiness in revenue growth estimates implies management has set up repeatable business methods instead of depending on single events.

Valuation Review

The valuation measures for EMCOR mirror the "reasonable price" part key to the GARP method. While not heavily reduced, the company's valuation seems warranted given its growth chances and operational standard:

• Trading at a P/E ratio of 27.08, EME sits close to S&P 500 averages but trades at a notable discount to industry peers
• The forward P/E of 24.01 implies slight multiple tightening as earnings growth continues
• Enterprise Value to EBITDA and Price/Free Cash Flow ratios both show the stock is less expensive than about two-thirds of industry rivals
• The PEG ratio, which changes the P/E for growth rates, shows suitable valuation relative to enlargement outlooks

For GARP investors, this valuation structure represents the ideal area, paying a fair cost for good growth instead of pursuing pricey momentum or accepting fixed value cases.

Profitability and Financial Condition

Beyond growth and valuation, EMCOR displays the basic strength that lowers investment risk. The company's profitability measures are especially notable, with returns greatly beating industry standards:

• Return on Invested Capital of 27.41% goes beyond 89% of industry peers and beats the company's three-year average
• Return on Equity is at 33.89%, doing better than 87% of competitors
• Operating margin of 9.41% sits in the top group of the industry and has shown steady gain
• All profitability margins have shown positive movements in recent years

The financial condition score of 9/10 highlights the company's steadiness, with several notable strong points:

• No debt on the balance sheet gives outstanding financial freedom
• Altman-Z score of 6.90 shows very low bankruptcy danger
• Steady share count decrease shows shareholder-minded capital use
• Firm cash flow creation backs ongoing operations without borrowing need

Investment Points

While EMCOR presents a strong GARP outline, investors should note certain points. The dividend yield stays very small at 0.15%, making the investment mainly a growth instead of income story. Current and quick ratios, while acceptable, do not equal the high quality of other condition measures, though this seems workable given the company's firm cash flow and absence of debt.

The company's detailed fundamental study report gives more understanding for those wanting deeper review of the financial measures driving these scores.

For investors curious in finding alike low-cost growth chances, our set filtering method methodically finds companies showing this mix of fair valuation, firm growth, and financial strength.

Disclaimer: This study is based on fundamental data and filtering methods for information only. It does not form investment advice, suggestion, or support of any security. Investors should do their own study and talk with financial advisors before making investment choices. Past results do not assure future outcomes, and all investments hold risk including possible loss of original funds.