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4 Heavy Construction Stocks Riding Higher Infrastructure Investment
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The Zacks Building Products – Heavy Construction industry continues to benefit from a broad infrastructure investment cycle in 2026. AI-driven data-center construction, cloud expansion, fiber deployment and related utility upgrades are creating substantial demand for engineering and construction services. At the same time, federal and state spending on transportation, water and energy infrastructure, together with grid modernization, transmission, natural gas and industrial investments, is supporting a healthy multiyear project pipeline. This environment favors companies such as EMCOR Group, Inc. (EME - Free Report) , Dycom Industries (DY - Free Report) , Granite Construction Incorporated (GVA - Free Report) and Tutor Perini Corporation (TPC - Free Report) , which bring diversified capabilities, specialized expertise and strong execution experience.
The operating backdrop, however, remains challenging. A persistent shortage of skilled labor is pushing wages higher and making workforce availability a key constraint. Growing project size and complexity, inflation, changing scopes, permitting bottlenecks and uncertainty around the timing of public funding can also pressure profitability. Against this backdrop, careful project selection, disciplined bidding, tight cost management and consistent execution remain critical for protecting margins and sustaining growth.
Industry Description
The Zacks Building Products - Heavy Construction industry consists of mechanical and electrical construction, industrial and energy infrastructure, as well as building service providers. This industry comprises heavy civil construction companies that specialize in the building and reconstruction of transportation projects, including highways, roads, bridges, airfields, ports and light rail. The companies serve commercial, industrial, utility and institutional clients. The industry players are engaged in the engineering, construction and maintenance of communications infrastructure, oil and natural gas pipelines, as well as processing facilities for energy and utility industries. These firms are also engaged in mining and dredging services in the United States and internationally.
4 Trends Shaping the Future of the Heavy Construction Industry
AI Infrastructure & Data Center Demand Drive Growth: AI infrastructure remains one of the strongest tailwinds for the U.S. Heavy Construction industry in 2026. Rapid growth in cloud computing, AI workloads and digital transformation is fueling demand for data centers, which require large-scale site work, electrical systems, mechanical systems, cooling infrastructure, fiber connectivity and utility upgrades. These projects are also expanding opportunities across adjacent areas such as grid connections, substations, concrete work and long-haul fiber networks. Rising demand for low-latency connectivity between data centers is further supporting telecom and fiber construction. Given the multiyear nature of these investments, contractors with scale, skilled labor and complex project execution capabilities are likely to benefit from strong backlog visibility and sustained bidding activity.
Infrastructure, Power & Energy Spending Stay Strong: Public infrastructure and energy-related construction remain major growth drivers for 2026. Federal and state spending continues to support highways, bridges, transit systems, airports, ports, water and wastewater projects. At the same time, rising electricity demand is driving investment in transmission lines, substations, grid hardening and reliability upgrades. Energy security needs are also supporting natural gas, LNG, power generation and industrial infrastructure projects. These trends are creating a broad-based construction pipeline beyond data centers. Large public and energy projects typically span several years, giving the industry better revenue visibility. Demand also remains healthy across healthcare, institutional facilities, manufacturing and high-tech manufacturing. Reshoring and industrial expansion are increasing requirements for electrical, mechanical and civil infrastructure, while building retrofits, HVAC upgrades, energy-efficiency projects and building controls add recurring modernization work. The combination of aging infrastructure, electrification, industrial reshoring and energy demand should keep project activity elevated through 2026.
Labor Shortages Remain a Key Constraint: Skilled labor availability remains one of the biggest headwinds for the U.S. heavy construction industry in 2026. Demand is rising across data centers, utilities, transportation, energy and public infrastructure at the same time, increasing competition for qualified workers. Large, complex projects require experienced electricians, mechanical workers, civil crews, project managers and safety professionals. A tight labor market can limit how quickly contractors scale, delay project schedules and raise wage costs. Companies are investing more in training, recruitment and workforce development, but labor supply remains a structural issue. This is especially important as customers seek execution certainty on multiyear projects and may prefer contractors that can reliably secure skilled crews.
Project Complexity, Costs & Timing Pressure Margins: Despite strong demand, margin pressure remains a key industry headwind. Heavy construction projects are becoming larger and more complex, especially in AI infrastructure, power, transit and public works. These projects often involve evolving designs, changing scopes, tight schedules and coordination across several trades. Contract mix can also affect profitability, as cost-plus, construction management and early-stage design projects may carry lower margins than traditional fixed-price work. Inflation in materials, equipment and subcontractor costs further increases the need for disciplined bidding and contract management. Permitting delays, funding approvals and customer timing decisions can also shift revenue recognition. As a result, execution discipline remains critical to converting strong demand into profitable growth.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Building Products - Heavy Construction industry is a nine-stock group within the broader Zacks Construction sector. The industry currently carries a Zacks Industry Rank #50, which places it in the top 20% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bullish near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
The industry’s positioning in the top 50% of the Zacks-ranked industries is a result of a higher earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually gaining confidence in this group’s earnings growth potential. Since June 2026, the industry’s earnings estimates for 2027 and 2028 have increased to $9.55 per share (from $8.92) and to $12.02 per share (from $11.25), respectively.
Before highlighting a few stocks worth considering for your portfolio, let’s first review the industry’s recent stock market performance and valuation trends.
Industry Outperforms Sector, Lags the S&P 500
The Zacks Building Products - Heavy Construction industry has performed better than the broader Zacks Construction sector but lagged the Zacks S&P 500 Composite over the past year.
Stocks in this industry have collectively gained 1.8% against the broader sector’s 6.2% decline. Meanwhile, the S&P 500 has jumped 15.3% in the said period.
One-Year Price Performance
Industry's Current Valuation
On the basis of the forward 12-month price-to-earnings ratio, which is a commonly used multiple for valuing heavy construction stocks, the industry is currently trading at 17.41X versus the S&P 500’s 19.71X and the sector’s 18X.
Over the past five years, the industry has traded as high as 28.44X, as low as 12.90X and at a median of 18.13X, as the chart below shows.
Industry’s P/E Ratio (Forward 12-Month) Versus S&P 500
Industry’s P/E Ratio (Forward 12-Month) Versus Sector
4 Heavy Construction Stocks to Keep an Eye On
Here, we have discussed four stocks from the industry that have solid growth potential.
Tutor Perini: Based in Sylmar, CA, this company is a construction company serving public and private clients. Tutor Perini has been gaining from the ramp-up of newer, higher-margin mega projects, which should sustain revenue and earnings expansion over the coming years. A strong backlog provides solid visibility, while continued U.S. infrastructure modernization and robust public and private funding are creating abundant bidding opportunities. Growth is also being reinforced by opportunities across transportation, federal infrastructure, healthcare, gaming, data centers and the Indo-Pacific region. Limited competition for larger projects, combined with selective bidding, favorable contract terms and disciplined cost assumptions, should further support profitable backlog growth and margin expansion.
Tutor Perini, currently carrying a Zacks Rank #1 (Strong Buy), has gained 33% over the past year. Earnings estimates for 2026 have risen to $5.39 from $5.18 per share over the past 60 days. Earnings for 2026 are expected to grow 25.6% from a year ago. TPC surpassed earnings estimates in all the trailing four quarters, with the average surprise being 17.8%. Again, it carries an impressive VGM Score of B. You can see the complete list of today’s Zacks #1 Rank stocks here.
Price and Consensus: TPC
EMCOR: Based in Norwalk, CT, EMCOR provides electrical and mechanical construction and related services in the United States and the United Kingdom. EMCOR has been gaining from strong demand for data centers and AI infrastructure, alongside expanding opportunities in healthcare, institutional, water and wastewater, manufacturing, logistics and industrial markets. The company also benefits from rising customer spending on HVAC retrofits, control-system upgrades, indoor-air-quality improvements and energy-efficiency initiatives. EMCOR’s ability to execute complex, mission-critical projects across multiple trades and geographies, deepen relationships with existing customers and expand project scope supports further organic growth. Strategic acquisitions are also broadening technical capabilities and geographic reach, while prefabrication, virtual design and disciplined project execution enhance competitiveness and capacity.
EMCOR, currently carrying a Zacks Rank #1, has gained 14.3% over the past year. Earnings estimates for 2026 have increased to $32.98 from $31.08 per share over the past 60 days. Earnings for 2026 are expected to grow 27.5% from a year ago. EMCOR surpassed earnings estimates in three of the trailing four quarters and missed on one occasion, with the average surprise being 12.2%.
Price and Consensus: EME
Dycom: Headquartered in Palm Beach Gardens, FL, this is a specialty contracting firm operating in the telecom industry. Dycom’s growth outlook is supported by sustained demand for digital and critical infrastructure. Expanding fiber-to-the-home programs, long-haul and middle-mile fiber builds and data-center interconnects are benefiting from cloud migration, AI workloads and rising connectivity needs. Recurring maintenance and operations services provide another growth avenue, while BEAD-funded broadband construction should create additional opportunities. Growth is also being driven by the expansion of Building Systems, supported by Power Solutions, strategic acquisitions, cross-selling and strong demand for electrical and structured-cabling solutions in data centers and other critical infrastructure markets.
Dycom, currently carrying a Zacks Rank #3 (Hold), has lost 7.7% over the past year. Nonetheless, earnings estimates for fiscal 2027 have increased to $17.10 from $16.91 per share over the past 30 days. The estimated value for fiscal 2027 is expected to increase 42.9% from the previous year. DY surpassed earnings estimates in all the trailing four quarters, with the average surprise being 24.5%. Again, it carries an impressive VGM Score of A.
Price and Consensus: DY
Granite: This Watsonville, CA, company provides infrastructure solutions to public and private clients across the United States. The company has been benefiting from strong public infrastructure spending, healthy bidding activity and continued market-share gains in its core transportation markets. Expansion into federal projects, rail and transit, data-center site development and potentially water and power infrastructure is broadening its end-market exposure. Collaborative contracting methods are also improving project quality and execution. In Materials, healthy demand, pricing discipline, automation and plant investments support growth and efficiency. In addition, disciplined acquisitions remain an important lever for expanding Granite’s geographic footprint and strengthening its market position.
Granite, currently carrying a Zacks Rank #3, has gained 6.2% over the past year. The Zacks Consensus Estimate for 2026 EPS is expected to grow 18.1% from the previous year. Again, it carries an impressive VGM Score of A.
View the Zacks #1 Rank List
Image: Bigstock
4 Heavy Construction Stocks Riding Higher Infrastructure Investment
The Zacks Building Products – Heavy Construction industry continues to benefit from a broad infrastructure investment cycle in 2026. AI-driven data-center construction, cloud expansion, fiber deployment and related utility upgrades are creating substantial demand for engineering and construction services. At the same time, federal and state spending on transportation, water and energy infrastructure, together with grid modernization, transmission, natural gas and industrial investments, is supporting a healthy multiyear project pipeline. This environment favors companies such as EMCOR Group, Inc. (EME - Free Report) , Dycom Industries (DY - Free Report) , Granite Construction Incorporated (GVA - Free Report) and Tutor Perini Corporation (TPC - Free Report) , which bring diversified capabilities, specialized expertise and strong execution experience.
The operating backdrop, however, remains challenging. A persistent shortage of skilled labor is pushing wages higher and making workforce availability a key constraint. Growing project size and complexity, inflation, changing scopes, permitting bottlenecks and uncertainty around the timing of public funding can also pressure profitability. Against this backdrop, careful project selection, disciplined bidding, tight cost management and consistent execution remain critical for protecting margins and sustaining growth.
Industry Description
The Zacks Building Products - Heavy Construction industry consists of mechanical and electrical construction, industrial and energy infrastructure, as well as building service providers. This industry comprises heavy civil construction companies that specialize in the building and reconstruction of transportation projects, including highways, roads, bridges, airfields, ports and light rail. The companies serve commercial, industrial, utility and institutional clients. The industry players are engaged in the engineering, construction and maintenance of communications infrastructure, oil and natural gas pipelines, as well as processing facilities for energy and utility industries. These firms are also engaged in mining and dredging services in the United States and internationally.
4 Trends Shaping the Future of the Heavy Construction Industry
AI Infrastructure & Data Center Demand Drive Growth: AI infrastructure remains one of the strongest tailwinds for the U.S. Heavy Construction industry in 2026. Rapid growth in cloud computing, AI workloads and digital transformation is fueling demand for data centers, which require large-scale site work, electrical systems, mechanical systems, cooling infrastructure, fiber connectivity and utility upgrades. These projects are also expanding opportunities across adjacent areas such as grid connections, substations, concrete work and long-haul fiber networks. Rising demand for low-latency connectivity between data centers is further supporting telecom and fiber construction. Given the multiyear nature of these investments, contractors with scale, skilled labor and complex project execution capabilities are likely to benefit from strong backlog visibility and sustained bidding activity.
Infrastructure, Power & Energy Spending Stay Strong: Public infrastructure and energy-related construction remain major growth drivers for 2026. Federal and state spending continues to support highways, bridges, transit systems, airports, ports, water and wastewater projects. At the same time, rising electricity demand is driving investment in transmission lines, substations, grid hardening and reliability upgrades. Energy security needs are also supporting natural gas, LNG, power generation and industrial infrastructure projects. These trends are creating a broad-based construction pipeline beyond data centers. Large public and energy projects typically span several years, giving the industry better revenue visibility. Demand also remains healthy across healthcare, institutional facilities, manufacturing and high-tech manufacturing. Reshoring and industrial expansion are increasing requirements for electrical, mechanical and civil infrastructure, while building retrofits, HVAC upgrades, energy-efficiency projects and building controls add recurring modernization work. The combination of aging infrastructure, electrification, industrial reshoring and energy demand should keep project activity elevated through 2026.
Labor Shortages Remain a Key Constraint: Skilled labor availability remains one of the biggest headwinds for the U.S. heavy construction industry in 2026. Demand is rising across data centers, utilities, transportation, energy and public infrastructure at the same time, increasing competition for qualified workers. Large, complex projects require experienced electricians, mechanical workers, civil crews, project managers and safety professionals. A tight labor market can limit how quickly contractors scale, delay project schedules and raise wage costs. Companies are investing more in training, recruitment and workforce development, but labor supply remains a structural issue. This is especially important as customers seek execution certainty on multiyear projects and may prefer contractors that can reliably secure skilled crews.
Project Complexity, Costs & Timing Pressure Margins: Despite strong demand, margin pressure remains a key industry headwind. Heavy construction projects are becoming larger and more complex, especially in AI infrastructure, power, transit and public works. These projects often involve evolving designs, changing scopes, tight schedules and coordination across several trades. Contract mix can also affect profitability, as cost-plus, construction management and early-stage design projects may carry lower margins than traditional fixed-price work. Inflation in materials, equipment and subcontractor costs further increases the need for disciplined bidding and contract management. Permitting delays, funding approvals and customer timing decisions can also shift revenue recognition. As a result, execution discipline remains critical to converting strong demand into profitable growth.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Building Products - Heavy Construction industry is a nine-stock group within the broader Zacks Construction sector. The industry currently carries a Zacks Industry Rank #50, which places it in the top 20% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bullish near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
The industry’s positioning in the top 50% of the Zacks-ranked industries is a result of a higher earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually gaining confidence in this group’s earnings growth potential. Since June 2026, the industry’s earnings estimates for 2027 and 2028 have increased to $9.55 per share (from $8.92) and to $12.02 per share (from $11.25), respectively.
Before highlighting a few stocks worth considering for your portfolio, let’s first review the industry’s recent stock market performance and valuation trends.
Industry Outperforms Sector, Lags the S&P 500
The Zacks Building Products - Heavy Construction industry has performed better than the broader Zacks Construction sector but lagged the Zacks S&P 500 Composite over the past year.
Stocks in this industry have collectively gained 1.8% against the broader sector’s 6.2% decline. Meanwhile, the S&P 500 has jumped 15.3% in the said period.
One-Year Price Performance
Industry's Current Valuation
On the basis of the forward 12-month price-to-earnings ratio, which is a commonly used multiple for valuing heavy construction stocks, the industry is currently trading at 17.41X versus the S&P 500’s 19.71X and the sector’s 18X.
Over the past five years, the industry has traded as high as 28.44X, as low as 12.90X and at a median of 18.13X, as the chart below shows.
Industry’s P/E Ratio (Forward 12-Month) Versus S&P 500
Industry’s P/E Ratio (Forward 12-Month) Versus Sector
4 Heavy Construction Stocks to Keep an Eye On
Here, we have discussed four stocks from the industry that have solid growth potential.
Tutor Perini: Based in Sylmar, CA, this company is a construction company serving public and private clients. Tutor Perini has been gaining from the ramp-up of newer, higher-margin mega projects, which should sustain revenue and earnings expansion over the coming years. A strong backlog provides solid visibility, while continued U.S. infrastructure modernization and robust public and private funding are creating abundant bidding opportunities. Growth is also being reinforced by opportunities across transportation, federal infrastructure, healthcare, gaming, data centers and the Indo-Pacific region. Limited competition for larger projects, combined with selective bidding, favorable contract terms and disciplined cost assumptions, should further support profitable backlog growth and margin expansion.
Tutor Perini, currently carrying a Zacks Rank #1 (Strong Buy), has gained 33% over the past year. Earnings estimates for 2026 have risen to $5.39 from $5.18 per share over the past 60 days. Earnings for 2026 are expected to grow 25.6% from a year ago. TPC surpassed earnings estimates in all the trailing four quarters, with the average surprise being 17.8%. Again, it carries an impressive VGM Score of B. You can see the complete list of today’s Zacks #1 Rank stocks here.
Price and Consensus: TPC
EMCOR: Based in Norwalk, CT, EMCOR provides electrical and mechanical construction and related services in the United States and the United Kingdom. EMCOR has been gaining from strong demand for data centers and AI infrastructure, alongside expanding opportunities in healthcare, institutional, water and wastewater, manufacturing, logistics and industrial markets. The company also benefits from rising customer spending on HVAC retrofits, control-system upgrades, indoor-air-quality improvements and energy-efficiency initiatives. EMCOR’s ability to execute complex, mission-critical projects across multiple trades and geographies, deepen relationships with existing customers and expand project scope supports further organic growth. Strategic acquisitions are also broadening technical capabilities and geographic reach, while prefabrication, virtual design and disciplined project execution enhance competitiveness and capacity.
EMCOR, currently carrying a Zacks Rank #1, has gained 14.3% over the past year. Earnings estimates for 2026 have increased to $32.98 from $31.08 per share over the past 60 days. Earnings for 2026 are expected to grow 27.5% from a year ago. EMCOR surpassed earnings estimates in three of the trailing four quarters and missed on one occasion, with the average surprise being 12.2%.
Price and Consensus: EME
Dycom: Headquartered in Palm Beach Gardens, FL, this is a specialty contracting firm operating in the telecom industry. Dycom’s growth outlook is supported by sustained demand for digital and critical infrastructure. Expanding fiber-to-the-home programs, long-haul and middle-mile fiber builds and data-center interconnects are benefiting from cloud migration, AI workloads and rising connectivity needs. Recurring maintenance and operations services provide another growth avenue, while BEAD-funded broadband construction should create additional opportunities. Growth is also being driven by the expansion of Building Systems, supported by Power Solutions, strategic acquisitions, cross-selling and strong demand for electrical and structured-cabling solutions in data centers and other critical infrastructure markets.
Dycom, currently carrying a Zacks Rank #3 (Hold), has lost 7.7% over the past year. Nonetheless, earnings estimates for fiscal 2027 have increased to $17.10 from $16.91 per share over the past 30 days. The estimated value for fiscal 2027 is expected to increase 42.9% from the previous year. DY surpassed earnings estimates in all the trailing four quarters, with the average surprise being 24.5%. Again, it carries an impressive VGM Score of A.
Price and Consensus: DY
Granite: This Watsonville, CA, company provides infrastructure solutions to public and private clients across the United States. The company has been benefiting from strong public infrastructure spending, healthy bidding activity and continued market-share gains in its core transportation markets. Expansion into federal projects, rail and transit, data-center site development and potentially water and power infrastructure is broadening its end-market exposure. Collaborative contracting methods are also improving project quality and execution. In Materials, healthy demand, pricing discipline, automation and plant investments support growth and efficiency. In addition, disciplined acquisitions remain an important lever for expanding Granite’s geographic footprint and strengthening its market position.
Granite, currently carrying a Zacks Rank #3, has gained 6.2% over the past year. The Zacks Consensus Estimate for 2026 EPS is expected to grow 18.1% from the previous year. Again, it carries an impressive VGM Score of A.
Price and Consensus: GVA