I would pick Price/Earnings ratio to do a direct valuation. I choose this metric because :
The value picked for the multiple = average of Price/Earnings ratio of comparable companies. We choose this because this captures the average of the ratio across the comparable universe.
Average = (18.02 + 10.75 + 17.65 + 14.23) / 4 = 15.16
Implied share price = EPS (TTM) of MTZ * average Price/Earnings ratio of comparable companies
Implied share price = $3.32 * 15.16 = $50.34
d. What metric would you pick to do a direct valuation for Mastec? Why did you...