MasTec Inc. Stock Downgraded (MTZ)

NEW YORK (TheStreet) -- MasTec (NYSE:MTZ) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and weak operating cash flow.

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Highlights from the ratings report include:

• The revenue growth came in higher than the industry average of 14.7%. Since the same quarter one year prior, revenues rose by 25.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
• MASTEC INC's earnings per share declined by 34.6% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MASTEC INC increased its bottom line by earning $1.23 versus $1.07 in the prior year. This year, the market expects an improvement in earnings ($1.42 versus $1.23).
• Despite currently having a low debt-to-equity ratio of 0.56, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.19 is sturdy.
• The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Construction & Engineering industry. The net income has significantly decreased by 32.9% when compared to the same quarter one year ago, falling from $21.11 million to $14.17 million.
• The gross profit margin for MASTEC INC is currently extremely low, coming in at 12.10%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.80% trails that of the industry average.

MasTec, Inc., an infrastructure construction company, engages in engineering, building, installing, maintaining, and upgrading energy, communication, and utility infrastructure in North America. The company has a P/E ratio of 14.3, equal to the average materials & construction industry P/E ratio and below the S&P 500 P/E ratio of 17.7. MasTec has a market cap of $1.31 billion and is part of the industrial goods sector and materials & construction industry. Shares are down 6.2% year to date as of the close of trading on Tuesday.

You can view the full MasTec Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

For more information on MasTec Inc. click any of the following:

• MasTec Inc. Stock Price

• MasTec Inc. Analyst Ratings

• MasTec Inc. Key Stats & Profile

• MasTec Inc. Earnings

• MasTec Inc. Ratio Comparison

• MasTec Inc. Growth Rates

• MasTec Inc. Balance Sheet

• MasTec Inc. Cash Flow

• MasTec Inc. Income Statement