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AECOM (ACM) Affiliate Receives $90 Million U.S. Army Contract
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AECOM Technical Services Inc. — an affiliate of AECOM (ACM - Free Report) — has received a contract from the U.S. Army for hazardous, toxic and radioactive waste services.
Shares of this leading solutions provider for supporting professional, technical and management solutions for diverse industries have gained 2.9% during the trading session on Nov 30, 2022.
Per the contract, AECOM Technical Services and others will compete for each order of the $90 million firm-fixed-price contract for the above-mentioned services.
Work under this contract is expected to be completed by Nov 29, 2027.
Solid Backlog Level: A Boon
As of September-end, the company’s total backlog came in at $40.18 billion (including 5% growth in the design business) compared with $38.58 billion reported in the prior-year quarter. The book-to-burn ratio of 1.2 reflects a 1.2 contribution from the Americas and 1.1 from the International.
The current backlog level — which is a key indicator of future revenue growth — depicts good visibility of growth for AECOM and pipelines for the upcoming quarters. Based on clients' strengthening funding backdrop, including benefits from the $1.2 trillion infrastructure bill in the United States, AECOM expects the backlog to continue to grow. Overall, the company’s performance demonstrates that it has been outgrowing the industry organically and capturing market share.
Notably, AECOM is in the leading position in transportation design, facilities design, green design and environmental engineering and holds several leadership positions in the water sector. The company is prioritizing its investments in Environmental, Social and Governance. The company has been benefiting from the industry-leading position in green building and green design, environmental compliance and remediation, energy efficiency and infrastructure resilience.
Over the past three months, AECOM shares have gained 18.6%, outperforming the industry’s 8.8% rise.
Image Source: Zacks Investment Research
AECOM’s superior return on equity (“ROE”) also indicates growth potential. The company’s ROE currently stands at 18.9%. This compares favorably with an ROE of 9.7% for the industry it belongs to. This indicates efficiency in using its shareholders’ funds and AECOM’s ability to generate profit with minimum capital usage.
Some better-ranked stocks which warrant a look in the Construction sector include:
EMCOR Group, Inc. (EME - Free Report) — carrying a Zacks Rank #2 (Buy) — is one of the leading providers of mechanical and electrical construction, industrial and energy infrastructure, as well as building services for a diverse range of businesses.
EME’s expected earnings growth rates for 2022 and 2023 are 10.2% and 17%, respectively. The Zacks Consensus Estimate for current-year and next-year earnings has improved 0.4% and 3.3%, respectively, over the past 30 days.
Sterling Infrastructure, Inc. (STRL - Free Report) — also carrying a Zacks Rank #2 — has been benefiting from broad-based growth across the e-infrastructure, building and transportation solutions segments.
STRL’s expected earnings growth rates for 2022 and 2023 are 47.4% and 6.3%, respectively. The Zacks Consensus Estimate for current-year and next-year earnings has improved 4.3% and 3.4%, respectively, over the past 30 days.
Altair Engineering Inc. (ALTR - Free Report) — also carrying a Zacks Rank #2 — provides software and cloud solutions in simulation, high-performance computing, data analytics and AI worldwide.
ALTR’s expected earnings growth rate for 2022 and 2023 is pegged at 10.6% and 21.5%, respectively.
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AECOM (ACM) Affiliate Receives $90 Million U.S. Army Contract
AECOM Technical Services Inc. — an affiliate of AECOM (ACM - Free Report) — has received a contract from the U.S. Army for hazardous, toxic and radioactive waste services.
Shares of this leading solutions provider for supporting professional, technical and management solutions for diverse industries have gained 2.9% during the trading session on Nov 30, 2022.
Per the contract, AECOM Technical Services and others will compete for each order of the $90 million firm-fixed-price contract for the above-mentioned services.
Work under this contract is expected to be completed by Nov 29, 2027.
Solid Backlog Level: A Boon
As of September-end, the company’s total backlog came in at $40.18 billion (including 5% growth in the design business) compared with $38.58 billion reported in the prior-year quarter. The book-to-burn ratio of 1.2 reflects a 1.2 contribution from the Americas and 1.1 from the International.
The current backlog level — which is a key indicator of future revenue growth — depicts good visibility of growth for AECOM and pipelines for the upcoming quarters. Based on clients' strengthening funding backdrop, including benefits from the $1.2 trillion infrastructure bill in the United States, AECOM expects the backlog to continue to grow. Overall, the company’s performance demonstrates that it has been outgrowing the industry organically and capturing market share.
Notably, AECOM is in the leading position in transportation design, facilities design, green design and environmental engineering and holds several leadership positions in the water sector. The company is prioritizing its investments in Environmental, Social and Governance. The company has been benefiting from the industry-leading position in green building and green design, environmental compliance and remediation, energy efficiency and infrastructure resilience.
Over the past three months, AECOM shares have gained 18.6%, outperforming the industry’s 8.8% rise.
Image Source: Zacks Investment Research
AECOM’s superior return on equity (“ROE”) also indicates growth potential. The company’s ROE currently stands at 18.9%. This compares favorably with an ROE of 9.7% for the industry it belongs to. This indicates efficiency in using its shareholders’ funds and AECOM’s ability to generate profit with minimum capital usage.
Zacks Rank & Key Picks
AECOM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks which warrant a look in the Construction sector include:
EMCOR Group, Inc. (EME - Free Report) — carrying a Zacks Rank #2 (Buy) — is one of the leading providers of mechanical and electrical construction, industrial and energy infrastructure, as well as building services for a diverse range of businesses.
EME’s expected earnings growth rates for 2022 and 2023 are 10.2% and 17%, respectively. The Zacks Consensus Estimate for current-year and next-year earnings has improved 0.4% and 3.3%, respectively, over the past 30 days.
Sterling Infrastructure, Inc. (STRL - Free Report) — also carrying a Zacks Rank #2 — has been benefiting from broad-based growth across the e-infrastructure, building and transportation solutions segments.
STRL’s expected earnings growth rates for 2022 and 2023 are 47.4% and 6.3%, respectively. The Zacks Consensus Estimate for current-year and next-year earnings has improved 4.3% and 3.4%, respectively, over the past 30 days.
Altair Engineering Inc. (ALTR - Free Report) — also carrying a Zacks Rank #2 — provides software and cloud solutions in simulation, high-performance computing, data analytics and AI worldwide.
ALTR’s expected earnings growth rate for 2022 and 2023 is pegged at 10.6% and 21.5%, respectively.