Why MasTec (MTZ) is a Strong Growth Stock

For both new and experienced investors, confidently navigating the stock market is a common goal. Utilizing tools that simplify and enhance the investment process can make this task easier. One such tool is Zacks Premium, which offers investors numerous resources to help them make informed decisions.

Zacks Premium provides vital daily updates on the Zacks Rank and Zacks Industry Rank, access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens. These resources empower investors to stay informed and confident about their stock choices.

Understanding the Zacks Style Scores

Among the many features offered, the Zacks Style Scores stand out as essential indicators for stock evaluation. Developed in conjunction with the Zacks Rank, these scores assess stocks based on three widely recognized investment approaches: value, growth, and momentum. This accessibility helps investors identify stocks with high potential to outperform the market within a short timeframe of 30 days.

Every stock is assigned a score from A to F, based on its value, growth, and momentum characteristics. A higher score increases the likelihood of the stock's outperformance in the market. The scoring system is divided into four distinct categories:

Value Score

Value investors often seek out stocks that are undervalued, meaning they can be purchased at a reasonable price compared to their actual worth. The Value Style Score employs various financial ratios like Price-to-Earnings (P/E) and Price-to-Sales to help identify these attractive investments.

Growth Score

In contrast, growth investors focus on a company's financial health and future growth potential. The Growth Style Score analyzes historical and anticipated earnings, sales, and cash flow to uncover stocks that exhibit sustainable growth prospects.

Momentum Score

Momentum investors tend to follow the adage "the trend is your friend," focusing on stocks experiencing upward or downward price movements. By assessing factors like weekly price changes and monthly earnings estimate revisions, the Momentum Style Score indicates optimal moments to invest in high-performing stocks.

VGM Score

Investors who appreciate a blend of strategies might consider the VGM Score. This score amalgamates the three individual Style Scores, providing a comprehensive view of value, growth, and momentum characteristics, allowing investors to identify stocks with attractive combinations of these traits.

How Style Scores Enhance the Zacks Rank

The Zacks Rank is a proprietary model used to rate stocks based on earnings estimate revisions. This model emphasizes the importance of changes in earnings expectations when building a successful portfolio.

Stocks ranked #1 (Strong Buy) have historically achieved an impressive average annual return of +25.41% since 1988, surpassing the S&P 500 by over twofold. With around 800 strong-rated stocks available daily, selecting the best options may seem daunting.

This is where Style Scores become advantageous. For optimal returns, investors should target stocks with a Zacks Rank of #1 or #2 that also have Style Scores of A or B. Even stocks ranked #3 (Hold) can be considered when accompanied by top Style Scores, ensuring maximum growth potential.

When evaluating stocks, it is vital to consider the trajectory of a stock's earnings estimate revisions, as the Style Scores and Zacks Rank work in tandem. For example, a stock rated #4 (Sell) or #5 (Strong Sell), despite having good Style Scores, usually indicates a bleak earnings outlook and, therefore, a higher risk of price decline.

Thus, constructing a portfolio primarily of stocks ranked #1 or #2, fortified by Style Scores of A or B, can significantly enhance investment outcomes.

Spotlight on MasTec (MTZ)

MasTec, Inc. is a prominent infrastructure construction company primarily active across North America. The company specializes in the engineering, construction, maintenance, and enhancement of energy, communication, utility, and various other infrastructures.

Currently, MTZ holds a Zacks Rank of #1 (Strong Buy), accompanied by an impressive VGM Score of A. Additionally, it stands out as a prime option for growth investors. MasTec's Growth Style Score is also rated A, projecting a remarkable earnings growth of 84.3% year-over-year for the current fiscal year.

Looking ahead to fiscal 2024, five analysts have raised their earnings estimates over the past two months, with the Zacks Consensus Estimate increasing by $0.62 to $3.63 per share. MasTec has achieved an average earnings surprise of 40.2%, further highlighting its robust performance.

With a solid Zacks Rank and strong Style Scores, MasTec is certainly worth considering for potential investors.

MasTec, Growth, Investment