The U.S. infrastructure construction landscape continues to benefit from sustained public and private investment as demand remains strong across transportation, utilities, energy infrastructure and mission-critical development. Within this evolving environment, Sterling Infrastructure, Inc. (STRL Quick QuoteSTRL - Free Report) and Primoris Services Corporation (PRIM Quick QuotePRIM - Free Report) have emerged as two well-positioned contractors, each capitalizing on long-term infrastructure spending trends and increasing complexity across large-scale, non-residential projects. As execution, backlog quality and margin durability take center stage, these two companies have become natural comparables for investors evaluating infrastructure and engineering stocks.

While one emphasizes high-margin site development and mission-critical projects tied to data centers and manufacturing, the other brings broad exposure across utility, energy and specialty construction services supported by diversified customers and recurring work frameworks. 

Furthermore, both Sterling and Primoris stand to benefit from easing financial conditions following recent monetary policy shifts, with the Federal Reserve cutting interest rates by a quarter percentage point for the third time this year on Dec. 10, 2025, trimming its benchmark rate to a range of 3.5% to 3.75%. Looking ahead, the central bank has also signaled the potential for one additional rate cut in 2026, a development that could further support infrastructure investment and project financing activity. 

Let’s dive deep and closely compare the fundamentals of the two stocks to determine which one may be the better investment now.

The Case for Sterling Stock

This Texas-based infrastructure services provider continues to gain momentum as demand remains strong across mission-critical end markets. During the third quarter of 2025, the company’s E-Infrastructure segment remained the primary growth engine, supported by sustained activity in data centers, manufacturing and large-scale distribution projects. Revenue growth was driven by higher project volumes and favorable execution, reflecting ongoing customer investment in complex, long-duration developments that require integrated site development and electrical capabilities.

A key contributor to this momentum has been the integration of CEC, which expanded Sterling’s electrical services platform and strengthened its position in mission-critical work. During the third quarter of 2025, CEC contributed more than $41 million in revenues while delivering margins in line with expectations, supporting consolidated margin performance. This integration has reinforced Sterling’s ability to pursue higher-value, multi-scope opportunities tied to large data center campuses and is expected to play a meaningful role in expanding segment margins through 2026 and 2027.

Despite strong demand, near-term headwinds remain. The company noted that some large projects carry elevated execution complexity, while permitting timelines and customer sequencing can create quarter-to-quarter variability. In addition, portions of the manufacturing pipeline remain in early stages, which may delay revenue recognition even as visibility improves. These factors introduce short-term noise but do not alter underlying demand trends.

Looking ahead, the company expects mission-critical markets to remain a key driver of growth through 2026, supported by expanding backlog and future project phases. In the third quarter of 2025, Sterling reported a $2.6 billion signed backlog, up 64% year over year, and when including negotiated awards and future phases of ongoing megaprojects, total potential work exceeds $4 billion. With an improving mix toward higher-margin electrical and site-development work, Sterling believes it is well positioned to deliver sustained revenue growth and margin expansion as large programs advance into full construction.

The Case for Primoris Stock

This Texas-based specialty construction and infrastructure company is benefiting from steady demand across its diversified Utilities and Energy segments. During the third quarter of 2025, the company continued to see solid activity across power, communications, renewables and pipeline-related work, supported by long-standing customer relationships and a balanced mix of project types. This diversification has helped stabilize revenues and reduce reliance on any single end market amid shifting industry conditions.

Confidence in the underlying business momentum was reflected in updated financial expectations. During the third quarter of 2025, the company raised its full-year adjusted EPS outlook to a range of $5.35 to $5.55, up from the prior band of $4.90 to $5.10 and well above the $3.87 reported in 2024. The increase was driven by sustained project execution, disciplined cost management and continued strength across core infrastructure markets.

However, margin performance remains a key area of concern. In the third quarter of 2025, consolidated margins declined 120 basis points year over year to 10.8%, reflecting lower contributions from higher-margin storm work, fewer favorable impacts from renewables and industrial projects compared with 2024, and higher costs on certain renewables projects due to adverse weather and project delays. These pressures have raised questions about the company’s ability to sustain profitability despite ongoing efficiency initiatives.

Looking ahead, the company expects diversified end-market exposure and a healthy project pipeline to support earnings stability into 2026. While margin recovery will remain a focus, Primoris believes disciplined execution, selective bidding and improving project mix can help offset near-term challenges and support longer-term value creation.

Stock Performance & Valuation

As witnessed from the chart below, in the year-to-date period, Sterling’s share price performance stands above Primoris and the Zacks Engineering - R and D Services industry.

Image Source: Zacks Investment Research

Considering valuation, Sterling is currently trading above Primoris on a forward 12-month price-to-earnings (P/E) ratio basis.

Image Source: Zacks Investment Research

Overall, from these technical indicators, it can be deduced that STRL stock offers an incremental growth trend with a premium valuation, while PRIM stock offers a slow growth trend with a discounted valuation.

Comparing EPS Estimate Trends of STRL & PRIM

The Zacks Consensus Estimate for STRL’s 2026 EPS indicates 14.6% year-over-year growth. The 2026 EPS estimate has increased to $11.95 over the past 60 days.

STRL's EPS Trend

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for PRIM’s 2026 earnings estimates implies year-over-year improvements of 5.3%. Its 2026 EPS estimate has decreased to $5.78 over the past 30 days.

PRIM’s EPS Trend

Image Source: Zacks Investment Research

Which Construction Stock Is the Better Buy Now?

Sterling and Primoris both benefit from long-term U.S. infrastructure spending, but their fundamentals point to different investment profiles. STRL is gaining momentum from its growing exposure to mission-critical projects, improving margin mix and expanding backlog tied to data centers and manufacturing. Primoris offers broader diversification across utilities and energy infrastructure, supported by steady demand, but faces near-term margin pressures that limit upside despite solid execution.

Given current trends, Sterling appears better positioned for near-term outperformance, supported by stronger earnings momentum and margin expansion potential, and carries a Zacks Rank #2 (Buy). Primoris, with a Zacks Rank #3 (Hold), remains a stable infrastructure operator but may require clearer margin recovery before upside becomes more compelling. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.