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Primoris (PRIM) Wins Multi-Year MSA for Utilities Segment

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Primoris Services Corporation (PRIM - Free Report) has received two multi-year Master Service Agreements (“MSA”) for the Utilities segment to support California’s gas distribution projects worth more than $225 million.

The first project, which has a two-year MSA, will be performed in northern California, while the other one, which is a five-year MSA, will be held in southern California for a major utility customer.

President and chief executive officer of Primoris, Tom McCormick, said, “We have long-standing relationships spanning over forty years with both major utilities. These multi-year master service agreements expand those relationships and extend our MSA portfolio into 2026.”

Solid Project Execution in the Utilities Segment Bodes Well

Primoris has been reaping benefits from strong project execution under the Utilities segment. The segment specializes in a range of services like telecommunications, and installation and maintenance of new and existing natural gas and electric utility distribution and transmission systems across the United States.

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In the last three quarters, the segment accounted for 46.5% of total revenues. Segment’s revenues grew 21.1% year over year for the said period. At September-end, the segment had a total backlog of $1.35 billion and expects to realize 100% revenues in the next four quarters. PRIM expects additional growth in the Utilities and Energy/Renewable segments over the next several years on strong Infrastructure Investment and Jobs Act.

Although shares of this Zacks Rank #5 (Strong Sell) company have underperformed the Zacks Building Products - Heavy Construction industry in the past three months, PRIM has been benefiting from solid performance across the segments.

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

Some Better-Ranked Stocks in the Construction Sector

Beazer Homes USA, Inc. (BZH - Free Report) currently sports a Zacks Rank #1. This Atlanta-based homebuilder continues to gain from strong operational execution and persistent strength in the housing market.

Beazer Homes’ shares have gained 52.2% in a year. Earnings are expected to grow 23.7% in fiscal 2022.

TRI Pointe Group Inc. (TPH - Free Report) currently carries a Zacks Rank #1. This Irvine, CA-based homebuilder designs, constructs, and sells single-family detached and attached homes in the United States. Robust demand and pricing as well as improved operating leverage have been driving TRI Pointe's performance. Cost-cutting initiatives implemented earlier this year and focus on entry-level buyers have been adding to the positives.

TRI Pointe’s shares have surged 62.1% in a year. Earnings for 2021 and 2022 are expected to rise 80.2% and 9.6%, respectively.

Meritage Homes Corporation (MTH - Free Report) currently sports a Zacks Rank #2 (Buy). Based in Scottsdale, AZ, Meritage Homes is one of the leading designers and builders of single-family homes. Its focus on entry-level LiVE.NOW homes has been a major driving factor.

MTH has gained 37.8% in a year. Earnings are expected to grow 74.4% in 2021 and 22.2% in the next year.