MasTec: Still Worthy Of Investment Dollars

Nov. 04, 2019 1:06 PM ETMasTec, Inc. (MTZ)1 Comment
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WG Investment Research


  • MasTec reported strong Q3 2019 results that beat the bottom-line estimates. Additionally, management raised their earnings guidance for full-year 2019.
  • I believe that MasTec's stock is still trading at attractive levels and that the company is well-positioned for 2020 and beyond.
  • I'm long MTZ shares, and I have no plans to reduce my stake in the near future.
  • This idea was discussed in more depth with members of my private investing community, Going Long With W.G.. Get started today »

MasTec (NYSE:MTZ) reported strong Q3 2019 results, and the market liked what it heard, as shown by the fact that MTZ shares shot up by almost 9%. On a YTD basis, MTZ shares are now outperforming the broader market by a very wide margin.

ChartData by YCharts

The solid stock performance so far in 2019 has been nice but, in my opinion, MasTec is still worthy of investment dollars even after the recent run-up. And it helps the bull case that the Q3 2019 results show that this small-cap infrastructure company still has promising business prospects.

The Latest, The Bull Case Keeps Getting Stronger

On October 31, 2019, MasTec reported Q3 2019 operating results that beat the bottom-line estimates but that fell a little short on the top-line. The company reported quarterly GAAP EPS of $1.69 (beat by $0.12) on revenue of $2.02B (missed by $120M), which also compares favorably to the year-ago quarter.

Source: Q3 2019 Press Release

Highlights from the quarter:

  • Revenue grew by ~2% YoY with the Communications and Power Generation and Industrial ("Power") divisions being the biggest contributors
  • Adjusted EPS increased by 110% YoY (from $1.55 to $1.71) and the adjusted EBITDA came in at $252.1M (an increase of $25.8M or 11.5%, from the year-ago quarter)

There was a lot to like about MasTec's Q3 2019 results, but I believe that the most important takeaway is the fact that the company still has a significant catalyst in place when it comes to 5G. Management actually referred to 5G deployment as one of the biggest business opportunities in MasTec's history.

The company announced a small tuck-in acquisition (QuadGen Wireless), which allows for MasTec to become a more of an end-to-end service provider in the space. I have long believed that 5G is a game-changer for MasTec

ChartData by YCharts

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This article was written by

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Our President and CIO is a CPA with experience in public accounting and the financial services industry. He earned his Master of Accountancy degree in 2008 and his B.S. in Business Management in 2007. He is also a Level III CFA candidate. He has been intrigued by the market from the start. Over the years, he has learned that long-term investing is a discipline that, if followed, will help contribute to building lasting wealth. As such, most of our articles will be about the investments that we plan to hold for at least 3 to 5 years, as long as the company's story does not change. As a Seeking Alpha contributor, our main goal is to write about the companies that are key to our portfolio with the hope of promoting discussion (for or against the investment) from others within the SA community.Please visit our website for more information about W.G. Investment Research LLC.

Disclosure: I am/we are long MTZ. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Disclaimer: This article is not a recommendation to buy or sell any stock mentioned. These are only my personal opinions. Every investor must do his/her own due diligence before making any investment decision.

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