Sterling Infrastructure (STRL Quick QuoteSTRL - Free Report) and Quanta Services (PWR Quick QuotePWR - Free Report) are well-positioned to benefit from the ongoing infrastructure investment cycle in the United States. Sterling operates through E-Infrastructure, Transportation and Building Solutions, giving it exposure to data centers, semiconductor facilities, manufacturing projects, highways and residential construction. Quanta, meanwhile, has a much larger infrastructure platform focused heavily on electric power, grid modernization, power generation, technology and large-load centers and other critical infrastructure markets.

The comparison is particularly relevant now, as both companies are benefiting from rising power demand, data-center investments, advanced manufacturing projects and infrastructure modernization. However, they differ meaningfully in growth rates, scale, valuation and capital efficiency.

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

The Case for Sterling Stock

Sterling continues to post exceptional operating growth, led by its E-Infrastructure business. Second-quarter 2026 revenues jumped 90% year over year to $1.17 billion, while adjusted earnings per share (EPS) surged 116% to $5.80. Adjusted EBITDA more than doubled, with the margin reaching 22%.

Demand visibility is another major strength. Signed backlog reached $4.3 billion at the end of the quarter, up 116% year over year, while combined backlog climbed 150% to $5.6 billion. Sterling also had more than $1.4 billion of high-probability future-phase opportunities, taking its total addressable pool of signed backlog, unsigned awards and future phases above $7 billion.

E-Infrastructure remains the key growth engine. Revenues in the segment increased 192%, supported primarily by data centers, semiconductor campuses and other mission-critical projects. Mission-critical work represented 92% of E-Infrastructure backlog at quarter-end. Sterling’s combination of site-development and electrical capabilities following the CEC acquisition should also help it pursue larger project scopes.

Nonetheless, concentration in mission-critical projects increases exposure to large-project timing and customer capital-spending decisions. Transportation revenues declined as Sterling shifted resources toward higher-margin E-Infrastructure work, while housing affordability continues to pressure Building Solutions.

The Case for Quanta Stock

Quanta offers greater scale, diversification and long-term project visibility. Second-quarter 2026 revenues climbed 41.1% year over year to $9.56 billion, while adjusted EPS rose 71% to $4.24. Adjusted EBITDA increased 59.5%, supported by strong execution across its infrastructure platform.

The company ended the quarter with a record backlog of $53.4 billion, offering substantial visibility into future revenues. Electric Infrastructure revenues benefited from strong demand for grid, power-generation, technology and load-center solutions, while self-perform capabilities and efficient resource utilization supported profitability.

Quanta is also strengthening its platform through acquisitions. Phalcon, Enerfab, Percheron and PSD expand electrical, mechanical, fabrication, manufacturing and front-end capabilities while adding exposure across utilities, technology, industrial, power and energy markets. Its high-voltage circuit-breaker joint venture further positions the company to benefit from growing electricity requirements tied to data centers, electrification and grid modernization.

However, Quanta remains exposed to regulatory approvals, permitting delays, labor availability, supply-chain constraints, tariffs and project timing. Its premium valuation also raises expectations for continued strong execution.

Sterling Maintains the Stronger Share-Price Momentum

Sterling shares have rallied 67.14% year to date compared with Quanta’s 52.3% gain. Both stocks have substantially outperformed the Zacks Engineering - R&D Services industry’s 16.9% rise, the S&P 500’s 11.5% increase and the broader Zacks Construction sector’s 1.3% decline.

STRL vs PWR Price Performance (YTD)

Image Source: Zacks Investment Research

Sterling therefore holds the edge in recent share-price momentum. MasTec MTZ is a relevant competitor given its exposure to power, communications and infrastructure construction.

Valuation Favors Sterling

Sterling is also more attractive from a forward earnings valuation standpoint. STRL currently trades at 21.17X forward 12-month earnings, below both Quanta’s 35.07X and the industry average of 25.2X.

STRL vs PWR Valuation (P/E F12M)

Image Source: Zacks Investment Research

The discount is notable given Sterling’s faster projected earnings growth. Quanta’s premium partly reflects its larger scale, highly diversified infrastructure portfolio and substantial backlog visibility, but investors are paying considerably more for those qualities. EMCOR Group EME is another relevant peer, particularly across electrical and mechanical infrastructure and mission-critical projects.

Sterling Shows Superior Capital Efficiency

Return on invested capital (ROIC) further strengthens Sterling’s case. STRL’s trailing 12-month ROIC stands at 28.86%, substantially above PWR’s 12.34%.

The higher ROIC suggests Sterling is currently generating considerably more operating return from the capital deployed in its business. This is particularly noteworthy given Sterling’s acquisition activity and rapid expansion into mission-critical infrastructure. Quanta’s ROIC remains healthy, but its capital-intensive growth strategy, larger acquisition program and broader asset base contribute to a lower return compared with Sterling. On this metric, Sterling has a clear advantage.

STRL vs PWR ROIC (TTM%)

Image Source: Zacks Investment Research

Estimate Revisions Remain Positive for Both

The Zacks Consensus Estimate for Sterling’s 2026 EPS is pegged at $20.02 over the past 60 days, implying growth of 84% from the prior year. Revenues are projected to rise 65.1%. For 2027, EPS is expected to increase 28.8% alongside 19.6% revenue growth.

STRL EPS Estimate Revision Trend

Image Source: Zacks Investment Research

Quanta’s 2026 EPS estimate has risen to $16.45, suggesting 53% year-over-year growth, while revenues are expected to increase 38.4%. For 2027, EPS and revenues are projected to grow 15.7% and 14.8%, respectively.

PWR EPS Estimate Revision Trend

Image Source: Zacks Investment Research

Sterling therefore offers the stronger near-term growth profile, although Quanta benefits from significantly greater backlog scale and end-market diversification.

Which Infrastructure Stock Has Better Upside Potential?

Sterling holds advantages in share-price momentum, valuation, ROIC and projected earnings growth. Its mission-critical infrastructure exposure is driving rapid expansion, while its sub-industry valuation leaves room for further earnings-driven appreciation.

Quanta, however, offers stronger diversification, substantially larger backlog visibility, robust cash generation and broader exposure to long-duration investments in electric grids, power generation and data centers.

Overall, Quanta — Zacks Rank #1 (Strong Buy) — currently appears to offer the better upside potential, supported by its diversified infrastructure platform. Sterling — Zacks Rank #3 (Hold) — remains compelling on valuation and capital efficiency, but Quanta’s combination of backlog scale, earnings visibility and broader secular exposure gives it the edge at present. You can see the complete list of today’s Zacks #1 Rank stocks here.