MYR Group (MYRG) enters 2021 in strong shape and is a capital-gains favorite for the year ahead, suggests Richard Moroney in his small to mid-cap oriented advisory service, Upside Stocks.

A provider of specialty electrical construction services, MYR has not suffered any significant project cancellations from the coronavirus pandemic, though there have been a few delays.

Additionally, MYRG says its primary construction markets — health care, transportation, data centers, warehousing, and renewable energy — appear less vulnerable to economic downturn.

Healthcare construction is expected to be one of few pockets of the economy to avoid the recession, with the American Institute of Architects forecasting 2% growth in 2020 and 3% growth in 2021. Warehouse construction is another area holding up well, given soaring demand for e-commerce during the pandemic.

MYR’s backlog has set a record in each of the past six quarters, reaching $1.72 billion at the end of September, or 0.78 of trailing 12-month sales. Analyst estimates for 2021 are marching higher but still look modest, with the consensus calling for earnings per share to climb 5% on revenue growth of 3%.

The shares trade at 19 times trailing earnings, below the median of 23 for S&P 1500 Index industrials stocks. MYR Group is rated a Best Buy.

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