Granite Construction Incorporated (GVA Quick QuoteGVA - Free Report) has been selected by the California Department of Transportation (Caltrans) to improve a portion of Ortega Highway State Route 74 (SR 74).

Valued at approximately $88 million, the project funding will be procured from state and federal sources. The construction work is expected to begin in April 2025 and be complete by November 2026.

GVA will be including this project in its first quarter of 2025 Committed and Awarded Projects (CAP).

Granite’s Work Scope

Per the Caltrans contract, the company is expected to widen the shoulders and roadway, allowing for the installation of centerline and edge line rumble strips. Additionally, this project will resurface the highway, ensuring safer and more efficient travel. The enhancements to be undertaken will ensure vehicle buffer room, significantly improving safety on this narrow two-lane mountainous highway.

Moreover, this contract by Caltrans builds on the foundation of Granite’s ongoing efforts on this stretch of highway over the past few years.

Per Bill Moore, Granite vice president of Regional Operations, “We have been working closely with Caltrans on this highway for several years, and we are excited to continue this partnership. It aligns with our strategic goal of expanding our footprint in the Inland Empire of Southern California.”

CAP – Growth Driver of Granite

Granite is focusing on growing a high-quality CAP portfolio on the back of a positive public funding environment and resilient private market. It remains focused on best-value projects where it can leverage the established relationships in its home markets to deliver larger projects while minimizing risk.

During the third quarter of 2024, Granite added $44 million to its CAP, bringing the total at the quarter end to $5.6 billion. The quarter-end value increased by $44 million sequentially and $35 million year over year. At the end of the same quarter, best-value projects represented 42% or $2.4 billion of the company’s CAP, representing an increase of $31 million from the year-ago quarter.

The best-value projects comprise a construction manager, general contractor and progressive design builds, to name a few. Granite believes that the best-value projects are more efficiently constructed and have a solid growth trajectory. Its history of best-value projects reinstates this belief.

Image Source: Zacks Investment Research

GVA’s shares have gained 39.9% in the past six months compared with the Zacks Building Products - Heavy Construction industry’s 41.8% growth. The company believes that strong opportunities across public and private markets will likely foster growth in the upcoming period.

GVA’s Zacks Rank & Key Picks

Granite currently carries a Zacks Rank #3 (Hold).

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