MYR Group Inc. MYRG has been implementing targeted strategies to capture new market opportunities in the evolving clean energy landscape. The company is also continuing with its organic and acquisitive expansion.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for 2023 earnings per share (EPS) has moved up 3.8% in the past 30 days to $5.81. This implies a year-over-year increase of 18.33%.
MYR Group reported first-quarter earnings of $1.38 per share, which beat the Zacks Consensus Estimate by 30.2%. The company delivered an average earnings surprise of 16.35% in the last four quarters.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing the funds to generate higher returns. Currently, MYRG’s ROE is 15.6%, higher than the sector average of 6.7%. This indicates that MYR Group has been utilizing the funds more constructively than its peers in the sector.
MYR Group continues to increase shareholders’ value through systematic share repurchases. As of Mar 31, 2023, the company repurchased 76,150 shares of stock from its employees, for approximately $7.9 million. On May 2, 2023, management approved a new share purchase program of $75 million, which will expire on Nov 8, 2023.
MYRG will fund the repurchase with cash on hand and borrowings under its credit facility. The company’s prior $75.0 million repurchase program that commenced on Nov 8, 2022, expired on May 8, 2023.
Debt Position & Liquidity
The company’s total debt to capital ratio is 4.25 compared with the industry’s average of 57.26. This indicates that it is managing the business far more efficiently than other operators in the sector.
MYR Group’s current ratio at the end of first-quarter 2023 was 1.36. This indicates that the company has enough financial flexibility to meet its short-term debt obligations.
Over the last three months, the MYRG stock has returned 10% against the sector’s average decline of 0.9%.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks in the Zacks utility sector are Global Water Resources, Inc. GWRS, IDACORP, Inc IDA and NiSource Inc. NI, each holding a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
GWRS’ long-term (three to five years) earnings growth rate is 15%. The consensus estimate for 2023 EPS is pegged at 31 cents, indicating year-over-year growth of 29.2%.
IDA’s long-term earnings growth rate is 3.68%. The Zacks Consensus Estimate for 2023 EPS is pinned at $5.07. The company delivered an average earnings surprise of 4.6% in the last four quarters.
NI’s long-term earnings growth rate is 6.9%. The Zacks Consensus Estimate for 2023 EPS is pegged at $1.57, implying a year-over-year improvement of 6.8%.
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