5 Heavy Construction Stocks Worth Watching in a Thriving Industry

Industry Overview - The Zacks Building Products - Heavy Construction industry is facing challenges such as high interest rates, project delays, labor market competition, and rising costs, yet maintains a strong outlook [1] - The industry includes mechanical and electrical construction, industrial and energy infrastructure, and building service providers, focusing on heavy civil construction for transportation projects [3] Growth Drivers - A robust infrastructure push from the U.S. government is driving significant growth, with investments in roads, bridges, broadband, and other critical upgrades [2] - The ramp-up of 5G projects is benefiting industry players, with increased demand for wireline and wireless networks [5] - The U.S. administration's infrastructure plan aims to create sustainable infrastructure, which is expected to boost the construction industry over the next five years [4] Market Performance - The Zacks Building Products - Heavy Construction industry has outperformed the broader Zacks Construction sector and the S&P 500, gaining 81.8% compared to the sector's 10.9% and the S&P 500's 22.4% over the past year [12] - The industry currently holds a Zacks Industry Rank of 87, placing it in the top 35% of over 250 Zacks industries, indicating solid near-term prospects [8][9] Earnings Outlook - Aggregate earnings estimates for the industry have increased from $7.09 to$7.18 per share for 2025, reflecting growing analyst confidence in earnings growth potential [10] - The industry's forward 12-month price-to-earnings ratio is 19.43, compared to the S&P 500's 22.25 and the sector's 17.48 [14] Company Highlights - Primoris Services: A specialty contractor with a backlog of $11.3 billion, focusing on solar and natural gas power generation, expected to grow earnings by 19.5$13.9 billion, expected to grow earnings by 47.4% in 2025 [24][25] - EMCOR Group: Provides electrical and mechanical construction services, benefiting from resilient demand and disciplined cost control, with earnings expected to grow by 7.2% in 2025 [27][28] - Dycom Industries: A telecom contracting firm leveraging demand for high-speed connectivity, with earnings expected to grow by 14.3% in fiscal 2026 [30][32]