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Orion Fortifies Marine Unit With Dredging Contract in Texas

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Orion Group Holdings, Inc.’s (ORN - Free Report) Marine segment has received a $16-million dredging services contract from the U.S. Army Corps of Engineers. Per the contract, Orion will dredge and remove approximately 5 million cubic yards of maintenance material from the inner Galveston Harbor out to the Texas-based Galveston Channel.

The work will start in first-quarter 2021 and is expected to be completed by mid-year. Mark Stauffer, Orion’s president and chief executive officer said, "This award adds further visibility into the utilization of our dredge fleet for 2021."

Orion’s Marine segment — which primarily provides construction, dredging and specialty services — accounts for almost 50% of total revenues. In the first six months of 2020, the segment’s revenues increased 18% year over year owing to better execution on the larger volume of work in the backlog, the mix of additional dredging work and significant project material purchases.

During second-quarter 2020 earnings call, the company noted that it won approximately $32 million of dredging contracts in both public and private sectors, which will help it maintain the utilization of dredge fleets in second-half 2020, stretching into 2021. Of these contracts, one was a result of Hurricane Harvey relief funding. The company expects additional significant bid opportunities related to the Harvey relief funding in the coming quarters. As of Jun 30, 2020, its total backlog was $528 million, of which $312 million was associated with the Marine segment.

Shares of this Zacks Rank #3 (Hold) company have gained 3.8% against the industry’s 6.4% decline in the past month. Earnings estimates for the year have moved 16% up in the past 30 days, reflecting analysts’ optimism over its prospects.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stocks to Consider

Some better-ranked stocks in the same industry include Dycom Industries, Inc. (DY - Free Report) , Sterling Construction Company, Inc. (STRL - Free Report) and Primoris Services Corporation (PRIM - Free Report) , each sporting a Zacks Rank #1. Dycom, Sterling and Primoris are expected to generate earnings growth of 24.2%, 66.7% and 5.6% for the current year, respectively.

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