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MasTec (MTZ) to Grow on Robust Communications Business
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On Mar 6, we issued an updated research report on MasTec, Inc. (MTZ - Free Report) . The company is poised to benefit from strong prospects for its communications business, improvement in shale-related activities, large industry awards and strong liquidity position. However, lower commodity prices, tepid oil and gas environment in Canada, and fluctuations in foreign currency exchange rates remain headwinds.
In its wireline and wireless communication markets, MasTec expects significant expansion related to both 5G and fiber deployment, as its communications business enjoys solid growth prospects. The company also anticipates significant opportunities related to gigabit broadband initiatives, along with fiber deployment.
In addition, MasTec remains optimistic about its pipeline business. Drilling activity in the shales has seen a significant uptick, so far, in 2017. The company has witnessed a significant year-over-year increase in number of drilling rigs. Also, with improving and stabilizing commodity prices, shale-related activities are likely to improve, going ahead.
For the Electrical Transmission business, MasTec estimates consistent improvement in results during 2017. The company foresees 2017 as a transitional year for this segment, with anticipated improvement in end market. It also expects to see large industry awards, moving ahead, driving growth in business in 2018 and beyond.
MasTec has a solid long-term capital structure, with low rates and no significant near-term maturities. As of year-end 2016, MasTec had liquidity of over $440 million, which provides full financial flexibility to take advantage of various growth opportunities.
However, the company’s performance in Canada continues to be dismal, mainly due to lower commodity prices, tepid oil and gas environment, along with the delay of large transmission projects.
Further, MasTec’s foreign operations are primarily based in Canada and Mexico. Thus, the company is subject to fluctuations in foreign currency exchange rates, when transactions are denominated in currencies other than the functional currencies, which might affect revenues.
MasTec currently carries a Zacks Rank #3 (Hold).
Share Price Performance
In the last one year, MasTec has outperformed the Zacks classified Building Products – Heavy Construction sub-industry with respect to price performance. The stock gained around 114.8%, while the industry rose 32.2% over the same time frame.
Dycom Industries has an earnings ESP of +17.30% for the trailing four quarters. Louisiana-Pacific has an impressive average earnings surprise of 66.28% for the last four quarters, while NVR, Inc. has an average earnings surprise of 0.90% for the past four quarters.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? Last year's market-beating Top 10 portfolio produced 5 double-digit winners. For example, oil and natural gas giant Pioneer Natural Resources and First Republic Bank racked up stellar gains of +44.9% and +44.3% respectively. Now a brand-new list for 2017 has been hand-picked from 4,400 companies covered by the Zacks Rank. See the 2017 Top 10 right now>>
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MasTec (MTZ) to Grow on Robust Communications Business
On Mar 6, we issued an updated research report on MasTec, Inc. (MTZ - Free Report) . The company is poised to benefit from strong prospects for its communications business, improvement in shale-related activities, large industry awards and strong liquidity position. However, lower commodity prices, tepid oil and gas environment in Canada, and fluctuations in foreign currency exchange rates remain headwinds.
In its wireline and wireless communication markets, MasTec expects significant expansion related to both 5G and fiber deployment, as its communications business enjoys solid growth prospects. The company also anticipates significant opportunities related to gigabit broadband initiatives, along with fiber deployment.
In addition, MasTec remains optimistic about its pipeline business. Drilling activity in the shales has seen a significant uptick, so far, in 2017. The company has witnessed a significant year-over-year increase in number of drilling rigs. Also, with improving and stabilizing commodity prices, shale-related activities are likely to improve, going ahead.
For the Electrical Transmission business, MasTec estimates consistent improvement in results during 2017. The company foresees 2017 as a transitional year for this segment, with anticipated improvement in end market. It also expects to see large industry awards, moving ahead, driving growth in business in 2018 and beyond.
MasTec has a solid long-term capital structure, with low rates and no significant near-term maturities. As of year-end 2016, MasTec had liquidity of over $440 million, which provides full financial flexibility to take advantage of various growth opportunities.
However, the company’s performance in Canada continues to be dismal, mainly due to lower commodity prices, tepid oil and gas environment, along with the delay of large transmission projects.
Further, MasTec’s foreign operations are primarily based in Canada and Mexico. Thus, the company is subject to fluctuations in foreign currency exchange rates, when transactions are denominated in currencies other than the functional currencies, which might affect revenues.
MasTec currently carries a Zacks Rank #3 (Hold).
Share Price Performance
In the last one year, MasTec has outperformed the Zacks classified Building Products – Heavy Construction sub-industry with respect to price performance. The stock gained around 114.8%, while the industry rose 32.2% over the same time frame.
Stocks to Consider
Some better-ranked stocks in the sector include Dycom Industries, Inc. (DY - Free Report) , Louisiana-Pacific Corp. (LPX - Free Report) and NVR, Inc. (NVR - Free Report) . All of these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Dycom Industries has an earnings ESP of +17.30% for the trailing four quarters. Louisiana-Pacific has an impressive average earnings surprise of 66.28% for the last four quarters, while NVR, Inc. has an average earnings surprise of 0.90% for the past four quarters.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? Last year's market-beating Top 10 portfolio produced 5 double-digit winners. For example, oil and natural gas giant Pioneer Natural Resources and First Republic Bank racked up stellar gains of +44.9% and +44.3% respectively. Now a brand-new list for 2017 has been hand-picked from 4,400 companies covered by the Zacks Rank. See the 2017 Top 10 right now>>