Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 7 stocks made the list for top value stocks in the Construction & Engineering industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Latest Construction & Engineering Stock News

Before choosing which top Construction & Engineering stock to buy, be sure to conduct proper due diligence: analyze various financial metrics and look at historical data, public statements and news coverage.

The Heavy and Civil Engineering Construction subsector comprises establishments whose primary activity is the construction of entire engineering projects, such as highways and dams, and specialty trade contractors, whose primary activity is the production of a specific component for such projects. Specialty trade contractors in the Heavy and Civil Engineering Construction subsector generally are performing activities that are specific to heavy and civil engineering construction projects and are not normally performed on buildings. The work performed may include new work, additions, alterations, or maintenance and repairs. Specialty trade activities are classified in this subsector if the skills and equipment present are specific to heavy or civil engineering construction projects. For example, specialized equipment is needed to paint lines on highways. This equipment is not normally used in building applications so the activity is classified in this subsector. Construction projects involving water resources, including dredging and land drainage, and projects involving open space improvement of parks and trails are included in this subsector. Some establishments in this subsector focus on the subdivision of land into individual building lots usually perform various additional site-improvement activities, like road building and utility line installation. Establishments in this subsector are classified based on the types of structures that they construct. This classification reflects variations in the requirements of the underlying production processes.

Why Focus on Undervalued Construction & Engineering Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

Click the button below to learn more about A+ Investor and subscribe today.

7 Undervalued Construction & Engineering Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 7 undervalued stocks in the Construction & Engineering industry for Thursday, December 29, 2022. Let’s take a closer look at their individual scores to see how they measure up against each other and the Construction & Engineering industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Aenza SAA (ADR)’s Value Grade

Value Grade:

Aenza SAA, formerly Grana y Montero SAA, is a Peru-based company which engages in the Industrial & Commercial Services Business Sector. The main objective of the Company is to engage in investments and commercial operations in general, as well as engineering services, management advice, real estate investments, acquisition, transfer and negotiation of shares, participations or shares of companies, as well as any other securities. The Company's purpose is to transform realities and living conditions promoting development responsible and facilitating the well-being of citizens in permanent commitment with society. The Company's goal is to give life to the means, spaces and resources that facilitate the urban life of people.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Aenza SAA (ADR) has a Value Score of 80, which is considered to be undervalued.

When you look at Aenza SAA (ADR)’s price-to-sales ratio at 0.07 compared to the industry median at 1.15, this company has a lower price relative to revenue compared to its peers. This could make Aenza SAA (ADR)’s stock more attractive for value investors.

Now, let’s assess Aenza SAA (ADR)’s EV/EBITDA ratio, also known as enterprise multiple. At 2.0, when compared to the industry median of 10.3, the company may be considered undervalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Aenza SAA (ADR)’s shareholder yield is lower than its industry median ratio of 0.0%. Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. Aenza SAA (ADR)’s price-to-book ratio is lower than its industry median ratio of 1.94. This could make Aenza SAA (ADR) more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Aenza SAA (ADR)’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Aenza SAA (ADR)’s price-to-free-cash-flow ratio is lower than its industry median ratio of 23.4. This could make Aenza SAA (ADR) more attractive because the lower P/FCF ratio indicates that Aenza SAA (ADR) is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

AMREP Corporation’s Value Grade

Value Grade:

Amrep Corporation is a holding company. The Company conducts business through its subsidiaries. The Company operates through two business segments: land development and homebuilding. Its land development segment offers for sale of both developed and undeveloped lots to national, regional and local homebuilders, commercial and industrial property developers and others. The Company owns approximately 17,000 acres in Sandoval County, New Mexico. The Company develops both residential lots and sites for commercial and industrial use as demand warrants. Its homebuilding segment offers a range of home floor plans and elevations at different prices and with varying levels of options and amenities to meet the needs of homebuyers. The Company focuses on selling single-family detached homes and attached townhomes. The Company selects locations for homebuilding based on available land inventory and completion of a feasibility study. The Company utilizes third-party sales brokers for home sales.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

AMREP Corporation has a Value Score of 97, which is considered to be undervalued.

AMREP Corporation’s price-earnings ratio is 4.3 compared to the industry median at 18.0. This means that it has a lower price relative to its earnings compared to its peers. This makes AMREP Corporation more attractive for value investors.

AMREP Corporation’s price-to-book ratio is lower than its peers. This could make AMREP Corporation more attractive for value investors when compared to the industry median at 1.94.

You can read more about AMREP Corporation’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Concrete Pumping Holdings Inc’s Value Grade

Value Grade:

Concrete Pumping Holdings, Inc. is a provider of concrete pumping services and concrete waste management services. The Company operates through four segments: U.S. Concrete Pumping, U.K. Operations, U.S. Concrete Waste Management Services and Corporate. The U.S. Concrete Pumping segment consists of concrete pumping services sold to customers in the United States, which is performed under the Brundage-Bone and Capital tradenames. The U.K. Operations segment consists of concrete pumping services and leasing of concrete pumping equipment to customers in the United Kingdom. The U.S. Concrete Waste Management Services segment consists of pans and containers rented to customers in the United States and the disposal of the concrete waste material services sold to customers in the United States, which is performed under the Eco-Pan tradename. The Corporate segment is primarily related to the intercompany leasing of real estate to certain of the U.S Concrete Pumping branches.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Concrete Pumping Holdings Inc has a Value Score of 66, which is considered to be undervalued.

Concrete Pumping Holdings Inc’s price-earnings ratio is 13.6 compared to the industry median at 18.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Concrete Pumping Holdings Inc more attractive for value investors.

Concrete Pumping Holdings Inc’s price-to-book ratio is higher than its peers. This could make Concrete Pumping Holdings Inc less attractive for value investors when compared to the industry median at 1.94.

You can read more about Concrete Pumping Holdings Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

iSun Inc’s Value Grade

Value Grade:

iSun, Inc. is engaged in solar engineering, construction and procurement contractor for commercial and industrial customers across the Northeastern United States. The Company provides solar engineering, procurement, and construction (EPC) services across residential, commercial & industrial, and utility-scale projects. It also provides solar electric vehicle charging solutions for both grid-tied and battery-backed solar electric vehicle charging systems. The Company’s Solar division designs, develops and construction (EPC) services for solar energy projects of every size and scale. The Solar division offers residential solar, commercial solar, industrial solar and utility solar. The Company’s iSun Mobility platform provides advanced electrical technologies to create a charging platform capable of accelerating electric vehicle adoption. The Company provides electrical contracting services and data and communication services.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

iSun Inc has a Value Score of 76, which is considered to be undervalued.

iSun Inc’s price-earnings ratio is 0.0 compared to the industry median at 18.0. This means that it has a lower price relative to its earnings compared to its peers. This makes iSun Inc more attractive for value investors.

iSun Inc’s price-to-book ratio is higher than its peers. This could make iSun Inc less attractive for value investors when compared to the industry median at 1.94.

You can read more about iSun Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Limbach Holdings Inc’s Value Grade

Value Grade:

Limbach Holdings, Inc. is an integrated building systems solutions firm. The Company is focused on the design, modular prefabrication, installation, management and maintenance of heating, ventilation, air-conditioning (HVAC), mechanical, electrical, plumbing and controls systems. The Company operates through two segments: General Contractor Relationships (GCR) and Owner Direct Relationships (ODR). The Company’s GCR segment manages new construction or renovation projects that involve HVAC, plumbing or electrical services awarded to the Company by general contractors or construction managers. The ODR segment provides maintenance or service on HVAC, plumbing or electrical systems, building controls and specialty contracting projects direct to, or assigned by, building owners or property managers. The Company operates in the Northeast, Mid-Atlantic, Southeast, Midwest, and Southwestern regions of the United States.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Limbach Holdings Inc has a Value Score of 78, which is considered to be undervalued.

Limbach Holdings Inc’s price-earnings ratio is 15.6 compared to the industry median at 18.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Limbach Holdings Inc more attractive for value investors.

Limbach Holdings Inc’s price-to-book ratio is higher than its peers. This could make Limbach Holdings Inc less attractive for value investors when compared to the industry median at 1.94.

You can read more about Limbach Holdings Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

R C M Technologies Inc’s Value Grade

Value Grade:

RCM Technologies, Inc. is a provider of business and technology solutions through the deployment of engineering, specialty health care and information technology services. The Company operates through three segments: Engineering, Specialty Health Care and Information Technology Services. Its Engineering segment provides engineering and design services, technical writing and digital documentation across marine, locomotive, transportation and aerospace markets, and engineering, procurement and construction management (EPC), as well as demand side management/energy conservation services. The specialty health care segment provides staffing solutions of health care professionals, nurses, paraprofessionals, physicians and therapists and teletherapy services. The Information Technology (IT), segment provides enterprise business solutions, application services, infrastructure solutions, life sciences solutions and other vertical specific offerings.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

R C M Technologies Inc has a Value Score of 84, which is considered to be undervalued.

R C M Technologies Inc’s price-earnings ratio is 5.9 compared to the industry median at 18.0. This means that it has a lower price relative to its earnings compared to its peers. This makes R C M Technologies Inc more attractive for value investors.

R C M Technologies Inc’s price-to-book ratio is lower than its peers. This could make R C M Technologies Inc more attractive for value investors when compared to the industry median at 1.94.

You can read more about R C M Technologies Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Sterling Infrastructure Inc’s Value Grade

Value Grade:

Sterling Infrastructure, Inc., formerly Sterling Construction Company, Inc., operates through a variety of subsidiaries in the United States. The Company is specializing in three segments E-Infrastructure, Transportation and Building Solutions in the United States (the U.S.), primarily across the Southern, Northeastern, Mid-Atlantic and the Rocky Mountain States, California and Hawaii. E-Infrastructure Solutions projects develop, large-scale site development systems and services for data centers, e-commerce distribution centers, commercial, warehousing, transportation, energy and more. The Transportation solutions includes infrastructure and rehabilitation projects for highways, roads, bridges, airports, ports, light rail, water, wastewater and storm drainage systems. Building Solutions projects include residential and commercial concrete foundations for single-family and multi-family homes, parking structures, elevated slabs and other concrete work.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Sterling Infrastructure Inc has a Value Score of 62, which is considered to be undervalued.

Sterling Infrastructure Inc’s price-earnings ratio is 11.4 compared to the industry median at 18.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Sterling Infrastructure Inc more attractive for value investors.

Sterling Infrastructure Inc’s price-to-book ratio is higher than its peers. This could make Sterling Infrastructure Inc less attractive for value investors when compared to the industry median at 1.94.

You can read more about Sterling Infrastructure Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Construction & Engineering Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Construction & Engineering stocks as well as other industrys.

Choosing Which of the 7 Best Construction & Engineering Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• Aenza SAA (ADR) stock has a Value Grade of B.
• AMREP Corporation stock has a Value Grade of A.
• Concrete Pumping Holdings Inc stock has a Value Grade of B.
• iSun Inc stock has a Value Grade of B.
• Limbach Holdings Inc stock has a Value Grade of B.
• R C M Technologies Inc stock has a Value Grade of A.
• Sterling Infrastructure Inc stock has a Value Grade of B.

Now that you have a bit more background about each of the 7 undervalued stocks in the Construction & Engineering industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Construction & Engineering Stocks

Want to learn more about Construction & Engineering stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 7 Undervalued Construction & Engineering Stocks for Thursday, December, 29
• Which Is a Better Investment, APi Group Corp or Comfort Systems USA, Inc. Stock?
• Which Is a Better Investment, Stantec Inc. (USA) or Valmont Industries, Inc. Stock?
• Is GiveMePower Corp(NDA) (GMPW) Stock a Good Investment?

AAII Disclaimer

We make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown, because past, hypothetical or simulated performance is not necessarily indicative of future results. Before making an investment decision, you should consider your circumstances and whether the information on our content is applicable to your situation. This information was prepared in good faith and we accept no liability for any errors or omissions. The full disclaimer can be read here.