EMCOR Group, Inc. (EME Quick QuoteEME - Free Report) has been benefiting from a combination of record project backlogs and robust demand across multiple end markets, particularly data centers, healthcare, manufacturing and institutional projects. Its market diversity and contributions from strategic buyouts have strengthened its competitive position.

Shares of this global provider of critical infrastructure and building services have surged 71.7% over the past year, outperforming the Zacks Building Products - Heavy Construction industry’s 60.1% growth. Its earnings per share (EPS) topped the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 16.7%.
 
Currently, EMCOR has had its 2025 EPS estimate revised upward to $25.00 from $23.59 over the past 60 days. Although lingering inflation pressures and supply chain uncertainties are concerning, the company’s organic and inorganic strategies have been driving growth.

EMCOR — a Zacks Rank #2 (Buy) stock — has a favorable VGM Score of B. Our research shows that stocks with a VGM Score of A or B, combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities to investors.

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Let’s delve into the major driving factors.

Factors Fueling Growth of EME Stock:

Strong Backlog and Market Diversity: EMCOR ended the second quarter with record Remaining Performance Obligations (RPOs) of $11.9 billion, up 32% year over year. This strength reflects demand across diverse end markets, including data centers, healthcare, manufacturing, institutional projects and hospitality. Notably, data center RPOs reached $3.8 billion, while healthcare and institutional projects each totaled around $1.4 billion, underlining the company’s balanced portfolio that shields it from overdependence on any single sector.

Acquisition: EMCOR continues to pursue an active acquisition strategy, helping to expand organically and strengthen its product line. On Feb. 3, 2025, the company acquired Miller Electric Company. Based in Jacksonville, FL, Miller Electric focuses on the design, installation and maintenance of sophisticated electrical systems serving industries like data centers, manufacturing and healthcare. Now officially part of the U.S. Electrical Construction and Facilities Services segment, the acquisition has strengthened EMCOR’s electrical construction portfolio in fast-growing end markets while also broadening its regional footprint.

Besides Miller Electric, during the first six months of 2025, EMCOR acquired three businesses in the United States. Acquisitions contributed $581.2 million to the total revenues during the same period, with Miller Electric contributing the maximum. The Miller buyout proved incremental to EMCOR’s RPO position, contributing about $947 million. EMCOR intends to maintain its disciplined approach to acquisitions, with a focus on expansion opportunities that align with its operational strengths.

EMCOR remains disciplined in capital allocation, with more than $430 million in share repurchases and nearly $900 million in acquisitions in the first half of 2025. Acquisitions like Miller Electric expand both capabilities and end-market reach, particularly in healthcare and institutional sectors.

Solid U.S. Construction Business: EMCOR’s U.S. Construction segment, comprising Mechanical and Electrical Construction segments, delivered strong performance in the second quarter of 2025, supported by healthy demand across the segments. During the first six months of 2025, revenues from the U.S. Electrical Construction and the U.S. Mechanical Construction segments grew year over year by 55.2% to $2.43 billion and 7.9% to $3.33 billion, respectively. While the Electrical segment saw gains across multiple market sectors, the strongest growth came from Network and Communications, fueled by higher demand for data center construction projects.

Operational Excellence and Prefabrication Advantage: Management highlighted the ability to execute complex projects through advanced tools such as Virtual Design & Construction and Building Information Modeling, combined with prefabrication. This strategy improves productivity, reduces labor dependence and enhances safety — factors that have contributed to construction margins exceeding 12% for several quarters.

Higher ROE: EMCOR’s trailing 12-month return on equity (ROE) is indicative of its growth potential. The company’s ROE of 38% compares favorably with the industry’s 18%, which signals more efficiency in using shareholders’ funds than peers.

Other Key Picks

Other top-ranked stocks from the Construction sector are Everus Construction Group Inc. (ECG Quick QuoteECG - Free Report) , Tutor Perini Corporation (TPC Quick QuoteTPC - Free Report) and Great Lakes Dredge & Dock Corporation (GLDD Quick QuoteGLDD - Free Report) .

Everus Construction Group presently sports a Zacks Rank #1. The company delivered a trailing four-quarter earnings surprise of 42.7%, on average. ECG stock has jumped 11% year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for ECG’s 2025 sales and EPS indicates growth of 18% and 3.9%, respectively, from the year-ago period’s levels.

Tutor Perini sports a Zacks Rank of 1 at present. The company delivered a trailing four-quarter earnings surprise of 387.2%, on average. Tutor Perini's stock has jumped 159.9% year to date.

The Zacks Consensus Estimate for Tutor Perini’s 2025 sales and EPS indicates growth of 21.2% and 220.8%, respectively, from the prior-year levels.

Great Lakes Dredge & Dock flaunts a Zacks Rank of 1 at present. The company delivered a trailing four-quarter earnings surprise of 45.3%, on average. Great Lakes Dredge & Dock stock has gained 3.5% year to date.

The Zacks Consensus Estimate for Great Lakes Dredge & Dock’s 2025 sales and EPS indicates growth of 9% and 21.4%, respectively, from the prior-year levels.