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Bull of the Day: MasTec (MTZ)

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MasTec, Inc. (MTZ - Free Report) recently raised full year guidance as its oil and gas business is surging. This Zacks Rank #1 (Strong Buy) is expected to grow earnings by the triple digits this year.

MasTec handles engineering and construction for electrical transmission, cross continental oil and natural gas pipelines, renewable energy and wireless networks.

Beat and Raise in the Second Quarter

Nothing is slowing down this engineering and construction firm, not even the energy crash.

On Aug 4, MasTec reported second quarter results which blew by the Zacks Consensus by 65%. Earnings were $0.33 compared to the Zacks Consensus of just $0.20.

Revenue jumped 15.5% to $1.2 billion from $1.1 billion in the year ago quarter due to improved productivity in its Oil & Gas segment.

Despite the energy downturn, it expects record levels of Oil & Gas revenue during the second half of 2016 as the large Dakota Access project has gotten underway and as it ramps up execution on other projects initiated at various times during the year.

It also has the visibility to forecast that Oil & Gas will continue to be strong into 2017.

But it's not a one-trick wonder as it saw significant growth in its Communications segment in the quarter and began to see improvement in its Electrical Transmission segment.

Its backlog jumped 31% to $5.3 billion from $4.1 billion at the end of the second quarter of 2015.

Big Guidance Increase

Given its growing backlog and its visibility on its Oil & Gas segment, MasTec raised full year EPS guidance to $1.57 from a range of $1.37 to $1.47.

7 estimates were revised higher for 2016 since the earnings report.

The 2016 Zacks Consensus Estimate has jumped to $1.46 from $1.31 in that period. That is earnings growth of 170% as the company made just $0.54 in 2015.

Analysts also raised estimates for 2017, with the 2017 Zacks Consensus Estimate soaring to $1.82 from $1.56. That's another 25% jump in earnings.

Shares at 1-Year High

With the company bullish on the second half of this year and even on 2017, it's not surprising that investors jumped into the shares.

While the pop put them at 52-week highs, they still are trying to catch up with where they were in 2015 when the energy downturn began to deepen and investors abandoned any stocks with energy exposure.

Shares are trading with a forward P/E of 20.5 which is more expensive than they were just a few months ago but, given the growth projections, is still attractive.

For investors looking for ways to play the infrastructure build-out, MasTec is one to keep on the short list.

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