How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in Quanta Services (NYSE:PWR) ten years ago? It may not have been easy to hold on to PWR for all that time, but if you did, how much would your investment be worth today?
Quanta Services' Business In-Depth
With that in mind, let's take a look at Quanta Services' main business drivers.
Quanta Services is a leading national provider of specialty contracting services, and one of the largest contractors serving the transmission and distribution sector of the North American electric utility industry. Quanta Services has operations in United States, Canada, Australia and other selected international markets.
At Dec 31, 2020, Quanta changed the name of Electric Power Infrastructure Services and Pipeline and Industrial Infrastructure Services segments to Electric Power Infrastructure Solutions and Underground Utility and Infrastructure Solutions, respectively. Nonetheless, there was no change in the composition of the segments.
The Electric Power Infrastructure Solutions segment (accounting for 69.4% of 2020 revenues) provides comprehensive network solutions to customers in the electric power industry. Services performed include the design, installation, upgrade, repair and maintenance of electric power transmission and distribution networks, and sub-station facilities; emergency restoration services; installation of “smart grid” technology on electric power networks; supports the development of renewable energy generation, including solar, wind, hydro power and backup natural gas generation facilities, and related switchyards and transmission infrastructure; and communications infrastructure services.
The Underground Utility and Infrastructure Solutions segment (30.6%) provides comprehensive network solutions to customers involved in the transportation of natural gas, oil and other pipeline products. Services include the design, installation, repair and maintenance of oil and gas transmission and distribution systems and related trenching and directional boring services. Also, this segment provides pipeline protection services, integrity testing, rehabilitation and replacement, and the fabrication of pipeline support systems and related structures and facilities for natural gas utilities and midstream companies. It also provides high-pressure and critical-path turnaround services to the downstream and midstream energy markets and instrumentation and electrical services, piping, fabrication and storage tank services.
Bottom Line
Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Quanta Services ten years ago, you're likely feeling pretty good about your investment today.
A $1000 investment made in September 2011 would be worth $6,512.94, or a gain of 551.29%, as of September 13, 2021, according to our calculations. This return excludes dividends but includes price appreciation.
The S&P 500 rose 286.28% and the price of gold increased -5.37% over the same time frame in comparison.
Analysts are forecasting more upside for PWR too.
Quanta Services’ shares have outperformed the industry in the year-to-date period. The company has been benefiting from a three-pronged growth strategy and continued strength of the electric power unit. It expects utility, communications, and certain pipeline and industrial infrastructure services — which currently account for approximately 80-90% of revenues — to remain robust in 2021. Quanta Services’ optimism stems from healthy backlog levels which are expected to grow further. Also, rising renewable generation development and associated demand bode well for the company. Also, raised view for 2021 is encouraging. Worryingly, lower revenues from larger pipeline projects are concerns. Its industrial operations and non-U.S. markets within the utility unit continue to remain under pressure owing to COVID-19 dynamics.
The stock has jumped 18.81% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 5 higher, for fiscal 2021; the consensus estimate has moved up as well.
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Quanta Services, Inc. (PWR): Free Stock Analysis Report
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