Comfort Systems provides mechanical contracting services, including heating, ventilation and air conditioning.iStockphoto
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Comfort Systems provides mechanical contracting services, including heating, ventilation and air conditioning, plumbing, piping and controls, as well as off-site construction, electrical, monitoring and fire protection. It installs, maintains and repairs products and systems throughout approximately 35 operating units in 81 cities and 89 locations throughout the United States. The company offers services for industrial, healthcare, education, office, technology, retail and government facilities.
Comfort Systems trades for 21.8 times EPS and has a 23% long-term EPS growth rate (using an average of 3- and 5-year EPS growth rates). That makes for a 0.93 P/E-to-growth ratio, part of why it gets strong interest from the Peter Lynch model.
The company generates a 45% return on capital, using the EBIT/tangible-capital-employed metric that Joel Greenblatt uses.
CS has a reasonable 16% debt/equity ratio, and a 12-month relative strength of 91, which has been increasing over the past four months, helping earn it high marks from the Momentum Investor model. It has a solid 13% return on retained earnings (those not paid out as dividends) over the past decade, which the Warren Buffett-based model likes. The momentum model also likes that its EPS jumped 86% last quarter.
Its low price/sales ratio of 0.73 helps it earn interest from the Kenneth Fisher-based strategy. It has a 17% return on equity.
John Reese is long FIX.
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