Engineering & Infrastructure

Engineering & Infrastructure During a most unforgettable pandemic-driven 2020, we found the various transformed business models executed over the past several years among our Engineering and Infrastructure companies succeeded in managing business flows, generating positive cash flow and positioning to benefit from the anticipated US and global economic recovery. A more balanced contract funding mix between more stable federal and cyclically and structurally private clients should allow for revenue, earnings and free cash flow performance during 2021. Several end markets should allow for share gains and contract opportunities during 2021 government services, environmental/ESG solutions, residential construction, utility T&D, select regional civil works, advanced manufacturing, mining. We note that anticipated Federal expansion of regulatory oversight and rules could allow for added contract work for most engineering solutions businesses, although we recognized potential for dampening investment incentives. We continue to emphasize investments in management teams that continue to support cultural, business changes while executing a more measured, upmarket contracting strategy. Tested through 2020, E&I companies emerge with growth opportunities and likely additional multiple expansion (Link to Engineering & Infrastructure Outlook).

Top Picks:

  • Fluor Corp. (FLR)

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Michael S. Dudas

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