MYR Group (MYRG) — our Top Pick for 2021 — has risen 55% so far this year, notes Richard Moroney, editor of Dow Theory Forecasts.

The stock has rallied more than 25% since April 28, when it reported impressive March-quarter results. Per-share earnings reached $1.17, up 98% and above the consensus of $0.62. Revenue increased 14% and outstripped expectations by 11%.

A key player in the electrical-construction industry, the company has attracted a customer base that includes utilities, independent power producers, and industrial and transmission companies.

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The migration by utilities toward renewable energy should be a significant source of growth for MYR. By 2050, the U.S. Energy Information Administration expects the share of renewables in the U.S. electricity generation mix to double to 42%.

MYR Group said its order backlog increased 7% to $1.64 billion. The company has surpassed earnings estimates in seven consecutive quarters, with an average surprise of 58%.

The shares look timely in our Quadrix rating system, scoring 84 or higher for Momentum, Earnings Estimates, and Performance. On the earnings call, the CEO said the company is seeing encouraging bidding activity across its markets, including solar energy storage.

Despite labor shortages, improved productivity and higher profit margins should help sustain earnings momentum. For 2021, Wall Street expects per-share profits of $4.47, up 28%. Three months ago, the consensus was $3.36. Revenue is expected to increase 7%.

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While MYR shares could pull back in a market pullback, we think the stock is capable of gaining another 20% over the next 12 months. MYR is rated as a Best Buy.

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