We recently published a list of 11 Best Engineering Stocks to Invest in Now. In this article, we are going to take a look at where Comfort Systems USA Inc. (NYSE:FIX) stands against other best engineering stocks to invest in now.
The global engineering services market was valued at $3.26 trillion in 2023, as reported by Grand View Research. It’s projected to grow at a CAGR of 5.5% from 2024 to 2030, due to several driving factors. Technological advancements, particularly the integration of automation, AI, and IoT, are dramatically enhancing productivity and operational efficiency. Simultaneously, rapid urbanization and substantial government investments are driving increased infrastructure development worldwide. Stringent environmental regulations are also forcing an emphasis on sustainable solutions, which further propels this market expansion.
According to ALLPLAN, the architecture, engineering, and construction (AEC) industry collectively is undergoing a fundamental shift, with sustainability transitioning from an optional consideration to an essential imperative. As the urgency of climate change intensifies, the built environment faces increasing pressure to minimize its environmental impact and contribute to global net-zero targets. The engineering industry is actively exploring and implementing innovative sustainable solutions. The adoption of green building materials, such as recycled aggregates and low-carbon concrete, is gaining traction as a means of reducing environmental footprints and promoting circular construction principles. Energy-efficient designs that incorporate passive strategies and renewable energy systems are becoming standard practice. The rise of smart cities, which are powered by IoT and AI, further underscores the industry’s commitment to urban sustainability.
Technology is pivotal for driving sustainable practices. Building Information Modeling (BIM) and Digital Twins empower engineering teams to optimize designs, reduce material waste, and enhance operational efficiency, which leads to more sustainable project outcomes. Automation and prefabrication are reshaping construction methodologies by minimizing both material waste and energy consumption. Real-time monitoring systems, which use IoT and AI, provide critical data for informed decision-making. Achieving sustainability in engineering projects necessitates a proactive and collaborative approach. Lifecycle assessments, localized material sourcing, and robust monitoring systems are essential engineering strategies. By embracing principles of technological innovation and collaborative engineering practices, engineers are mitigating the environmental impact of their projects and creating more resilient and sustainable infrastructure.
Our Methodology
We used the Finviz stock screener to compile an initial list of top engineering stocks. We then selected 11 engineering stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
An engineer inspecting a newly renovated electrical installation.
Comfort Systems USA Inc. (NYSE:FIX)
Number of Hedge Fund Holders: 50
Comfort Systems USA Inc. (NYSE:FIX) specializes in the engineering, installation, and maintenance of mechanical and electrical systems. It provides MEP solutions for new and existing buildings across the US. Its services encompass HVAC, plumbing, electrical, and fire protection, with a focus on design, engineering, and remote monitoring for commercial, industrial, and institutional clients.
The company’s Mechanical segment experienced substantial growth in 2024, with full-year revenue increasing by 40% year-over-year. This was driven by acquisitions, modular expansion, and significant organic construction and service growth. The segment’s performance contributed to a record-breaking year for the company, with overall revenue reaching $7 billion, which was a 35% increase from 2023.
The Mechanical segment’s backlog is robust and broadly based, with contributions from the industrial sector, which accounted for over 60% of the company’s 2024 volume. This includes the growing technology sector which encompasses data centers and chip fabs that represented 33% of the company’s revenue. Modular construction, which is a key component of the Mechanical segment, accounted for 17% of the total 2024 revenue.
Carillon Chartwell Small Cap Growth Fund stated the following regarding Comfort Systems USA Inc. (NYSE:FIX) in its first quarter 2024 investor letter:
“Another strong performer was Comfort Systems USA, Inc. (NYSE:FIX). The company is a modular construction company, involved in manufacturing plant and data center construction. Given strong demand trends, the company is reporting record growth and backlogs.”
Overall, FIX ranks 5th on our list of best engineering stocks to invest in now. While we acknowledge the growth potential of FIX, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than FIX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
