MasTec Inc.

MasTec Inc. (MTZ - Snapshot Report) recently issued bullish 2009 guidance after closing on a $400 million acquisition. In November, the company reported all-time record quarterly revenue. MTZ is trading at 9.6x forward earnings.

Company Description

MasTec Inc. designs and builds infrastructure for communication companies, utilities and governments through the United States. For 75 years, MasTec has designed infrastructure such as power delivery systems, cable and satellite television networks, fiber optic highways, natural gas systems, and voice, video and data networks.

The company has long-term service and maintenance agreements with companies such as DirecTV, Verizon, AT&T, Progress Energy, and Florida Power & Light.

On Dec 17, MasTec announced it had completed the previously announced acquisition of Wanzek Construction, Inc. which will expand the company's reach into the alternative energy market.

Wanzek was focused on wind farm construction, as well as natural gas processing plants and compressor stations, electrical power generating plants, roads and bridges and other heavy projects. Wanzek had anticipated 2008 annual revenue of $400 million.

MasTec paid $50 million in cash, 7.5 million shares of MasTec common stock, obtained seller financing through a $55 million convertible note, assumed $15 million of Wanzek's debt and a 2-year earnout equal to 50% of Wanzek's EBITDA in excess of $40 million per year.

2009 Guidance Issued

The company recently issued 2009 guidance which included the impact of the Wanzek acquisition. Revenue is expected to be in the range of $1.95 billion to $2 billion.

Earnings per share are forecast in the range of $1.05 to $1.15. 2009 consensus estimates are at $1.11, which would be growth of 17.26% over 2008.

MasTec Posted Record Revenue in the Third Quarter

On Nov 5, MasTec reported third quarter earnings that beat Wall Street estimates by 12.50%. Revenue jumped 49% to a record high of $398 million from $267 million in 2007.

The gains came from the company's strategy to grow business with utilities customers as revenue doubled from last year. Revenue from utilities customers made up 32% of revenue in the third quarter compared to 20% in the third quarter of 2007.

The wireless segment also had an impact on third-quarter revenue as AT&T revenue increased 256%, due to the recent Nsoro acquisition, compared to third-quarter 2007.

Earnings per share rose to 36 cents per share from 18 cents in the year ago period. Analysts expected 32 cents.

The company has ample available cash and credit with a $151 million credit facility.

Value Fundamentals

MasTec is a Zacks #1 Rank (strong buy) stock. The company has surprised on estimates 4 consecutive quarters by 13.84%.

It's trading with a forward P/E of 9.56. MasTec's price-to-book is 1.94. MTZ also has an excellent 1-year return on equity (ROE) of 18.16%.