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Comfort Systems (FIX) Expands With the J & S Acquisition

Comfort Systems USA, Inc. FIX strengthened its market standing by acquiring J & S Mechanical Contractors, Inc., based in West Jordan, UT. Founded in 1976, J & S specializes in mechanical construction services across the Mountain West region, undertaking complex projects for commercial and industrial clients.

This strategic move is expected to contribute significantly to Comfort Systems' growth, with J & S initially adding annualized revenues ranging from $145 million to $160 million. Moreover, J & S is anticipated to bring in earnings before interest, taxes, depreciation, and amortization of $12 million to $15 million.

As a valuable addition to Comfort Systems, J & S is forecasted to make a neutral to slightly accretive contribution to earnings per share in 2024 and 2025, considering amortization expenses. The acquisition aligns with Comfort Systems' commitment to excellence, as J & S boasts a robust reputation in Utah, delivering outstanding results in industrial, institutional, and commercial markets.

Comfort Systems continues to position itself as a leader in the industry, leveraging the expertise and regional influence gained through the acquisition of J & S. Investors can anticipate enhanced profitability and market presence as Comfort Systems capitalizes on J & S's established track record and deep roots in the region.

Acquisitions: A Growth Driver

FIX remains dedicated to pursuing growth through acquisitions while concurrently returning value to shareholders through cash dividends and stock repurchases.

On Feb 1, 2024, Comfort Systems successfully completed the acquisition of Summit Industrial Construction, LLC. Summit, a specialized industrial mechanical contractor, enhances Comfort Systems' capabilities in engineering, design-assist, and turnkey construction services for modular systems.

On Feb 1, 2023, Comfort Systems acquired Eldeco, Inc., based in South Carolina. Specializing in electrical design and construction services in the Southeastern region of the United States, Eldeco is now a fully owned subsidiary of Comfort Systems. This integration is reflected in FIX's electrical segment, marking a strategic expansion in the company's service portfolio and regional presence.

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Shares of Comfort Systems have surged 91.2% over the past year, outperforming the Zacks Building Products - Air Conditioner and Heating industry’s 43.6% rise. The company has been experiencing increased revenues across its operations. Notably, the modular business demonstrated exceptional performance during third-quarter 2023, managing extraordinary growth with superb execution.

Zacks Rank & Key Picks

Comfort Systems currently carries a Zacks Rank #3 (Hold).

Here are some better-ranked stocks from the Zacks Construction sector:

Martin Marietta Materials, Inc. MLM currently carries a Zacks Rank #2 (Buy). The stock has gained 12.5% in the past six months. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

MLM delivered a trailing four-quarter earnings surprise of 37.3%, on average. The Zacks Consensus Estimate for MLM’s 2024 sales and EPS indicates growth of 9.5% and 13.1%, respectively, from a year ago.

North American Construction Group Ltd. (NOA) currently carries a Zacks Rank #2. The stock has declined 9.2% in the past six months.

NOA surpassed earnings expectations in three of the trailing four quarters and missed on one occasion, the average surprise being 22.4%. The Zacks Consensus Estimate for NOA’s 2024 sales and EPS indicates growth of 44.1% and 51.7%, respectively, from a year ago.

Howmet Aerospace Inc. HWM currently carries a Zacks Rank #2. The stock has gained 14.4% in the past six months.

HWM surpassed earnings expectations in three of the trailing four quarters and met on one occasion, the average surprise being 5%. The Zacks Consensus Estimate for HWM’s 2024 sales and EPS indicates growth of 7.5% and 21.7%, respectively, from a year ago.

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Comfort Systems USA, Inc. (FIX) : Free Stock Analysis Report

Howmet Aerospace Inc. (HWM) : Free Stock Analysis Report

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