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We have recently issued an updated research report on specialty contracting services provider, Dycom Industries Inc. (DY - Free Report) , on Jun 27 and have ample reasons to believe the stock can be an attractive addition to your portfolio now.
With the Brexit vote rattling the global financial markets the U.S. stalling interest rates for the time being and the slowdown in China, there is no telling where the markets are headed in the next few months. Despite these odds, here’s four reasons why Dycom can be a good one to bet on.
4 Factors to Consider
Earnings History: The company has a solid earnings track record, beating estimates in three out of four times with an average earnings surprise of 19.6% over the last four quarters. During the third quarter of 2016, the company reported adjusted earnings per share of $1.08 in the quarter, crushing the Zacks Consensus Estimate of 75 cents by 44%.
Bullish Sentiments: Over the last 30 days, earnings estimates of the company for the fiscal fourth quarter went up 7.6% to $1.56, reflecting bullish sentiment among brokers. Also, the earnings estimate for fiscal 2016 increased 9.1% to $4.40 per share over the same time frame. This when combined with a Zacks Rank #1 (Buy) makes Dycom an interesting pick.
Growth Prospects: Dycom’s business primarily benefits from increased demand for network bandwidth and mobile broadband, given the proliferation of smart phones. The company has been continuously benefiting from extensive deployment of 1-Gigabyte wireline networks by major customers. Most of the telecommunication companies are deploying fiber-to-the-home and fiber-to-the-node technologies to enable video offerings and 1-gigabit high-speed connections, thereby opening up significant opportunities for Dycom.
Going forward, the company believes that surging demand for 1 gigabit deployments from several large customers, huge investments in wireline networks, cable capacity projects and the ongoing Connect America Fund II project will significantly drive growth in market share. Encouragingly, five of the six top customers have experienced growth on an organic basis in the reported quarter for the fifth consecutive time since the second quarter of fiscal 2008. This is providing Dycom with ample opportunities to drive growth through market share and geographic footprint expansion.
Financial Health: Dycom’s strong financial position, coupled with diligent operational execution, allows it to undertake strategic initiatives for expanding market share. Exiting the quarter ending Jan 23, 2016, Dycom had liquidity of over $197 million under credit facility and cash on hand. Also, the company repurchased around 1.56 million shares for $100 million, reducing shares outstanding by 4.7% during the third quarter of fiscal 2016. Moreover, the company authorized the repurchase of up to an additional $100 million of shares over the next 17 months.
To Conclude
Dycom has been always been a potential outperformer in the Industrial Goods sector, proving its mettle even in times of distress. Apart from impressive earnings history and strong growth outlook, the company underlines its prospects by fending off competition as well. Dycom competes with Chicago Bridge & Iron Company N.V. , EMCOR Group Inc. (EME - Free Report) and Granite Construction Incorporated (GVA - Free Report) , all of which carry a Zacks Rank #3 (Hold).
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4 Reasons Why Dycom (DY) is a Compelling Pick
We have recently issued an updated research report on specialty contracting services provider, Dycom Industries Inc. (DY - Free Report) , on Jun 27 and have ample reasons to believe the stock can be an attractive addition to your portfolio now.
With the Brexit vote rattling the global financial markets the U.S. stalling interest rates for the time being and the slowdown in China, there is no telling where the markets are headed in the next few months. Despite these odds, here’s four reasons why Dycom can be a good one to bet on.
4 Factors to Consider
Earnings History: The company has a solid earnings track record, beating estimates in three out of four times with an average earnings surprise of 19.6% over the last four quarters. During the third quarter of 2016, the company reported adjusted earnings per share of $1.08 in the quarter, crushing the Zacks Consensus Estimate of 75 cents by 44%.
Bullish Sentiments: Over the last 30 days, earnings estimates of the company for the fiscal fourth quarter went up 7.6% to $1.56, reflecting bullish sentiment among brokers. Also, the earnings estimate for fiscal 2016 increased 9.1% to $4.40 per share over the same time frame. This when combined with a Zacks Rank #1 (Buy) makes Dycom an interesting pick.
Growth Prospects: Dycom’s business primarily benefits from increased demand for network bandwidth and mobile broadband, given the proliferation of smart phones. The company has been continuously benefiting from extensive deployment of 1-Gigabyte wireline networks by major customers. Most of the telecommunication companies are deploying fiber-to-the-home and fiber-to-the-node technologies to enable video offerings and 1-gigabit high-speed connections, thereby opening up significant opportunities for Dycom.
Going forward, the company believes that surging demand for 1 gigabit deployments from several large customers, huge investments in wireline networks, cable capacity projects and the ongoing Connect America Fund II project will significantly drive growth in market share. Encouragingly, five of the six top customers have experienced growth on an organic basis in the reported quarter for the fifth consecutive time since the second quarter of fiscal 2008. This is providing Dycom with ample opportunities to drive growth through market share and geographic footprint expansion.
Financial Health: Dycom’s strong financial position, coupled with diligent operational execution, allows it to undertake strategic initiatives for expanding market share. Exiting the quarter ending Jan 23, 2016, Dycom had liquidity of over $197 million under credit facility and cash on hand. Also, the company repurchased around 1.56 million shares for $100 million, reducing shares outstanding by 4.7% during the third quarter of fiscal 2016. Moreover, the company authorized the repurchase of up to an additional $100 million of shares over the next 17 months.
To Conclude
Dycom has been always been a potential outperformer in the Industrial Goods sector, proving its mettle even in times of distress. Apart from impressive earnings history and strong growth outlook, the company underlines its prospects by fending off competition as well. Dycom competes with Chicago Bridge & Iron Company N.V. , EMCOR Group Inc. (EME - Free Report) and Granite Construction Incorporated (GVA - Free Report) , all of which carry a Zacks Rank #3 (Hold).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>