Investing in US Construction & Engineering: PWR vs FIX vs PRIM

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  • Abstract

    The U.S. construction and engineering sector is experiencing a significant boom, driven by infrastructure investments, rapid urbanization, and the rise of renewable energy projects. Leading companies such as Quanta Services (PWR), Comfort Systems USA (FIX), and Primoris Services Corporation (PRIM) are capitalizing on these trends, each demonstrating strong performance. Among them, PRIM stands out with exceptional financial health and attractive valuation metrics, positioning it as a compelling choice for investors. PWR and FIX are also performing well, benefiting from the sector’s growth momentum.

    With substantial government spending and ongoing urbanization fueling demand, the sector presents promising opportunities for long-term investors. However, thorough research, clear investment goals, and effective risk management remain crucial to navigating this dynamic landscape successfully.

    Both companies are poised for growth driven by increasing healthcare demands and infrastructure expansion.

    - Founder, Narayan Healthcare

  • Valuation

    P/E RATIO

    • PWR stands at a P/E ratio of 54.2x.
    • FIX is at a P/E ratio of 32.3x.
    • PRIM shows a P/E ratio of 24.3x.
    • These numbers indicate that PRIM is considerably undervalued when compared to its competitors.

    P/B RATIO

    • PWR’s P/B ratio stands at 6.2x.
    • FIX’s P/B ratio is 9.5x.
    • On the other hand, PRIM’s P/B ratio is significantly lower at 3x.

    PEG RATIO

    • PWR boasts a PEG ratio of 3.54.
    • FIX’S PEG ratio is recorded at 0.66.
    • PRIM, meanwhile, has a PEG ratio of 0.90.Analyzing the PEG ratios reveals that FIX is currently undervalued relative to its peers.

    The key to trading success is emotional discipline. If intelligence were the key, there would be a lot more people making money trading… I know this will sound like a cliche, but the single most important reason that people lose money in the financial markets is that they don’t cut their losses short.

    - Victor Sperandeo

  • Cash Analysis

    All three companies have reported significant improvements in operating cash flow for Q3 FY24:

    • PWR saw an 82% increase to $740 million (LTM),
      • up from $391 million (LTM) in Q3 FY23.
    • FIX reported a 41% rise to $302 million (LTM),
      • compared to $214 million (LTM) in Q3 FY23.
    • PRIM achieved a 133% increase to $416 million (LTM),
      • up from $178 million (LTM) in Q3 FY23.
  • Key Players in the Sector

    1. Fluor Corporation (NYSE: FLR): A global leader in engineering and construction, focusing on energy, chemicals, and infrastructure projects.
      AECOM (NYSE: ACM): A multinational firm providing design, consulting, and construction services for infrastructure, transportation, and environmental projects.
    2. Quanta Services (NYSE: PWR): A leading provider of specialized infrastructure services for the electric power, oil, and gas industries, including renewable energy projects.
    3. Comfort Systems USA (FIX): A major player in mechanical, electrical, and plumbing (MEP) services for commercial and industrial buildings.
    4. Primoris Services Corporation (NYSE: PRIM): Provides construction services for energy, utilities, and infrastructure projects, with a growing focus on renewable energy.

    This report provides a comparative analysis of Quanta Services, Comfort Systems USA, and Primoris Services Corporation, examining their competitive dynamics in the U.S. construction and engineering sector.

  • US Economy

    The U.S. construction and engineering sector is a vital component of the nation’s economy, driving infrastructure development, urbanization, and economic growth. It encompasses various activities, including residential, commercial, industrial, and infrastructure construction, as well as engineering services for design, planning, and project management. Recent trends shaping the sector include urbanization, sustainability, technological advancements, and government investments in infrastructure.

    Key Growth Drivers

    • Infrastructure Investments: $1.2 trillion allocated for roads, bridges, railways, and clean energy infrastructure.
    • Renewable Energy: Funding boost for solar and wind farms driving demand for construction services.
    • Urbanization: Rapid urbanization fueling demand for residential and commercial construction.
    • Sustainability: Emphasis on green building, energy efficiency, and renewable energy projects.
    • Technological Advancements: Adoption of BIM, drones, and automation improving efficiency and reducing costs.
    • Resilience and Disaster Recovery: Demand for resilient infrastructure and disaster recovery projects due to natural disasters.
  • Technical Analysis

    Daily Technical Analysis express a Channel Breakout
    Daily Technical Analysis express a Channel Breakout

    • The charts for PWR, FIX, and PRIM exhibit similar trends, with stock prices currently experiencing a strong uptrend.
    • Based on this momentum, it is expected that this trend will persist, driving prices even higher in the near future.
  • Revenue & Profit Analysis

    PWR

    1. Q3 FY24 sales: $6.493 billion, up 16% sequentially and 15.5% YoY
    2. Q3 EBITDA: $619 million, a significant increase from $463 million in Q2 and $542 million in Q3 FY23
  • Technical Strength

    Daily Technical Analysis express a Channel Breakout
    Daily Technical Analysis express a Channel Breakout

    • The charts for PWR, FIX, and PRIM exhibit similar trends, with stock prices currently experiencing a strong uptrend.
    • Based on this momentum, it is expected that this trend will persist, driving prices even higher in the near future.
  • Revenue & Profit Analysis

    PWR

    1. Q3 FY24 sales: $6.493 billion, up 16% sequentially and 15.5% YoY
    2. Q3 EBITDA: $619 million, a significant increase from $463 million in Q2 and $542 million in Q3 FY23

    INK

  • %blog-repeater-title%

    Abstract

    The U.S. construction and engineering sector is experiencing a significant boom, driven by infrastructure investments, rapid urbanization, and the rise of renewable energy projects. Leading companies such as Quanta Services (PWR), Comfort Systems USA (FIX), and Primoris Services Corporation (PRIM) are capitalizing on these trends, each demonstrating strong performance. Among them, PRIM stands out with exceptional financial health and attractive valuation metrics, positioning it as a compelling choice for investors. PWR and FIX are also performing well, benefiting from the sector’s growth momentum.

    With substantial government spending and ongoing urbanization fueling demand, the sector presents promising opportunities for long-term investors. However, thorough research, clear investment goals, and effective risk management remain crucial to navigating this dynamic landscape successfully.

    Both companies are poised for growth driven by increasing healthcare demands and infrastructure expansion.

    - Founder, Narayan Healthcare

    %blog-repeater-title%

    Valuation

    P/E RATIO

    • PWR stands at a P/E ratio of 54.2x.
    • FIX is at a P/E ratio of 32.3x.
    • PRIM shows a P/E ratio of 24.3x.
    • These numbers indicate that PRIM is considerably undervalued when compared to its competitors.

    P/B RATIO

    • PWR’s P/B ratio stands at 6.2x.
    • FIX’s P/B ratio is 9.5x.
    • On the other hand, PRIM’s P/B ratio is significantly lower at 3x.

    PEG RATIO

    • PWR boasts a PEG ratio of 3.54.
    • FIX’S PEG ratio is recorded at 0.66.
    • PRIM, meanwhile, has a PEG ratio of 0.90.Analyzing the PEG ratios reveals that FIX is currently undervalued relative to its peers.

    The key to trading success is emotional discipline. If intelligence were the key, there would be a lot more people making money trading… I know this will sound like a cliche, but the single most important reason that people lose money in the financial markets is that they don’t cut their losses short.

    - Victor Sperandeo

    %blog-repeater-title%

    Cash Analysis

    All three companies have reported significant improvements in operating cash flow for Q3 FY24:

    • PWR saw an 82% increase to $740 million (LTM),
      • up from $391 million (LTM) in Q3 FY23.
    • FIX reported a 41% rise to $302 million (LTM),
      • compared to $214 million (LTM) in Q3 FY23.
    • PRIM achieved a 133% increase to $416 million (LTM),
      • up from $178 million (LTM) in Q3 FY23.

    %blog-repeater-title%

    Key Players in the Sector

    1. Fluor Corporation (NYSE: FLR): A global leader in engineering and construction, focusing on energy, chemicals, and infrastructure projects.
      AECOM (NYSE: ACM): A multinational firm providing design, consulting, and construction services for infrastructure, transportation, and environmental projects.
    2. Quanta Services (NYSE: PWR): A leading provider of specialized infrastructure services for the electric power, oil, and gas industries, including renewable energy projects.
    3. Comfort Systems USA (FIX): A major player in mechanical, electrical, and plumbing (MEP) services for commercial and industrial buildings.
    4. Primoris Services Corporation (NYSE: PRIM): Provides construction services for energy, utilities, and infrastructure projects, with a growing focus on renewable energy.

    This report provides a comparative analysis of Quanta Services, Comfort Systems USA, and Primoris Services Corporation, examining their competitive dynamics in the U.S. construction and engineering sector.

    %blog-repeater-title%

    US Economy

    The U.S. construction and engineering sector is a vital component of the nation’s economy, driving infrastructure development, urbanization, and economic growth. It encompasses various activities, including residential, commercial, industrial, and infrastructure construction, as well as engineering services for design, planning, and project management. Recent trends shaping the sector include urbanization, sustainability, technological advancements, and government investments in infrastructure.

    Key Growth Drivers

    • Infrastructure Investments: $1.2 trillion allocated for roads, bridges, railways, and clean energy infrastructure.
    • Renewable Energy: Funding boost for solar and wind farms driving demand for construction services.
    • Urbanization: Rapid urbanization fueling demand for residential and commercial construction.
    • Sustainability: Emphasis on green building, energy efficiency, and renewable energy projects.
    • Technological Advancements: Adoption of BIM, drones, and automation improving efficiency and reducing costs.
    • Resilience and Disaster Recovery: Demand for resilient infrastructure and disaster recovery projects due to natural disasters.

    %blog-repeater-title%

    Technical Analysis

    Daily Technical Analysis express a Channel Breakout
    Daily Technical Analysis express a Channel Breakout

    • The charts for PWR, FIX, and PRIM exhibit similar trends, with stock prices currently experiencing a strong uptrend.
    • Based on this momentum, it is expected that this trend will persist, driving prices even higher in the near future.

    %blog-repeater-title%

    Revenue & Profit Analysis

    PWR

    1. Q3 FY24 sales: $6.493 billion, up 16% sequentially and 15.5% YoY
    2. Q3 EBITDA: $619 million, a significant increase from $463 million in Q2 and $542 million in Q3 FY23

    %blog-repeater-title%

    Technical Strength

    Daily Technical Analysis express a Channel Breakout
    Daily Technical Analysis express a Channel Breakout

    • The charts for PWR, FIX, and PRIM exhibit similar trends, with stock prices currently experiencing a strong uptrend.
    • Based on this momentum, it is expected that this trend will persist, driving prices even higher in the near future.

    %blog-repeater-title%

    Revenue & Profit Analysis

    PWR

    1. Q3 FY24 sales: $6.493 billion, up 16% sequentially and 15.5% YoY
    2. Q3 EBITDA: $619 million, a significant increase from $463 million in Q2 and $542 million in Q3 FY23

    INK

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    Details of Arijit Banerjee

    Arijit Banerjee CMT CFTe is a seasoned expert in the financial industry, boasting decades of experience in trading, investment, and wealth management. As the founder and chief strategist of Naranj Capital, he’s built a reputation for providing insightful research analysis to guide investment decisions.

    Arijit’s credentials are impressive, holding both the Chartered Market Technician (CMT) and Certified Financial Technician (CFTe) designations. These certifications demonstrate his expertise in technical analysis and financial markets.

    Through Naranj Capital, Arijit shares his market insights and research analysis, offering actionable advice for investors. His work is featured on platforms like TradingView, where he publishes detailed analysis and recommendations.

    If you’re interested in learning more about Arijit’s work or Naranj Capital’s services, you can reach out to them directly through their website