Operating Margin - EMCOR Group Inc (NYSE:EME)

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Price: 626.47 USD -0.09%

Market Cap: 28B USD

9.4%

Current

Average

5.1%

Industry

Operating Margin represents how efficiently a company is able to generate profit through its core operations.

Higher ratios are generally better, illustrating the company is efficient in its operations and is good at turning sales into profits.

Operating Margin

9.4%

Operating Profit

1.5B

Revenue

16.2B

Operating Margin Across Competitors

Country		Company	Market Cap	Operating Margin
US		EMCOR Group Inc NYSE:EME	28B USD	9%
FR		Vinci SA PAR:DG	66.3B EUR	12%
US		Quanta Services Inc NYSE:PWR	68.1B USD	6%
IN		Larsen & Toubro Ltd NSE:LT	5.5T INR	9%
IN		Larsen and Toubro Ltd F:LTO	51.6B EUR	9%
NL		Ferrovial SE AEX:FER	40.7B EUR	10%
ES		Ferrovial SA MAD:FER	40.7B EUR	10%
US		Comfort Systems USA Inc NYSE:FIX	34.9B USD	13%
CN	C	China State Construction Engineering Corp Ltd SSE:601668	214.9B CNY	4%
DE	H	Hochtief AG XETRA:HOT	24.9B EUR	4%
ES		ACS Actividades de Construccion y Servicios SA MAD:ACS	22.4B EUR	3%

EMCOR Group Inc
Glance View

Economic Moat

Narrow

Market Cap

28B USD

Industry

Construction

In the dynamic world of construction and facilities services, EMCOR Group Inc. stands out as a formidable player, ingeniously merging engineering expertise with operational efficiency. Born from a history of strategic acquisitions and expansions, EMCOR's roots trace back to the conglomerate Jamaica Water Supply Company, transforming over the years into a diversified enterprise. As the company expanded, it carved out a unique niche through its proficiency in mechanical and electrical construction services. The core of EMCOR's operations revolves around designing, constructing, and maintaining complex systems for commercial and government facilities. Their employees, a team of highly skilled engineers, technicians, and project managers, ensure that structures such as hospitals, data centers, and airports operate seamlessly. By focusing on high-demand sectors like healthcare, technology, and energy, EMCOR aligns its services with industries that require robust, innovative solutions, cementing its reputation for reliability and excellence. EMCOR's savvy business model thrives on its capacity to deliver both comprehensive facilities maintenance and scalable construction services. The company generates revenue by maintaining long-term service contracts and tackling significant construction projects. This dual focus allows EMCOR to harness the steadiness of recurring revenue from maintenance agreements, while simultaneously pursuing growth through large-scale construction ventures. Further enhancing its profitability, EMCOR leverages technological advances such as energy-efficient systems, contributing to both client satisfaction and environmental sustainability. Notably, the company’s resilience during economic downturns is largely attributed to its diversified portfolio and strategic focus on sectors that consistently demand maintenance and upgrades, providing a buffer against cyclicality and underpinning steady financial growth. Through this multifaceted approach, EMCOR not only sustains its operational momentum but also continuously adapts to the evolving commercial landscape.

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EME Intrinsic Value

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

The AI Assistant may sometimes provide inaccurate information.

Make your own investment decisions or consult a licensed financial advisor.

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EMCOR Group Inc
NYSE:EME