The infrastructure sector is thriving, fueled by rapid urbanization, increased global spending, and technological progress. As the world slowly moves into a more digitized age, rapid urbanization and innovative infrastructure are expected to drive transformation in the sector.
Amid this backdrop, investors could scoop up shares of fundamentally stable construction stocks, Caterpillar Inc. (CAT), EMCOR Group, Inc. (EME), and MasTec, Inc. (MTZ). These stocks are well-positioned to benefit from the increased infrastructure spending.
Digital transformation is helping to overcome the difficulties in traditional infrastructure planning and development. By leveraging a range of advanced tools, from big data analytics to automation driven by artificial intelligence (AI), the infrastructure industry can achieve its goals with greater speed and accuracy.
Furthermore, as the demand for improved and more advanced infrastructure increases, so does the substantial scope for investments. According to a study by PwC, worldwide capital project and infrastructure spending is expected to reach $9 trillion in 2025.
Looking ahead, a report published by Mordor Intelligence forecasts the infrastructure sector to expand to $3.92 trillion by 2030, growing at a CAGR of 6.3%. The robust growth showcases the ample opportunities present in the industry for investors to capitalize on.
Now, let us dive deep into the fundamentals of three construction stocks, starting with #3.
Stock #3: Caterpillar Inc. (CAT)
CAT manufactures and sells construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. The company’s segments include Construction Industries; Resource Industries; Energy & Transportation; Financial Products; and All Other.
On November 7, 2024, CAT announced a successful demonstration of the fully autonomous operation of its Cat® 777 off-highway truck at Luck Stone's Bull Run plant in Chantilly, Va. The commercial release of this truck could expand the company's autonomous truck fleet and enhance its position in the autonomous industrial solutions market.
On September 17, 2024, CAT unveiled Cat® Dynamic Energy Transfer, an innovative OEM-designed solution aimed at solving the energy management aspect of the mining industry’s energy transition. Equipped with abilities to lower operating costs and greenhouse gas emissions, the release enhances the company’s mining solutions portfolio.
For the fiscal 2024 fourth quarter that ended December 31, 2024, CAT’s total sales and revenues came in at $16.22 billion. Its operating profit was reported to be $2.92 billion. Additionally, the company’s profit and profit per common share amounted to $2.79 billion and $5.78, respectively.
Analysts expect CAT’s revenue and EPS for the fiscal 2025 first quarter (ending in March) to come in at $14.78 billion and $4.47, respectively. In addition, the company surpassed the consensus EPS estimates in three of the four trailing quarters.
CAT’s stock has surged 5.7% over the past year, closing the last trading session at $342.36.
CAT’s POWR Ratings reflect its fundamentals. The stock has a B grade for Stability and Quality. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
Within the A-rated Industrial – Machinery industry, CAT is ranked #37 out of 77 stocks. In addition to the POWR Rating highlighted above, you can check CAT’s ratings for Value, Growth, Sentiment, and Momentum here.
Stock #2: EMCOR Group, Inc. (EME)
EME provides construction and facilities, building, and industrial services. The company’s offerings include design, integration, installation, start-up, operation, and maintenance services related to power transmission, distribution, and generation systems.
On February 3, 2025, EME announced the acquisition of Miller Electric Company, a leading electrical contractor serving high-growth areas across the Southeastern U.S., for a transaction cost of $865 million in cash. The acquisition expands EME's electrical capabilities and increases its presence in high-growth sectors.
For the fiscal 2024 third quarter that ended September 30, 2024, EME’s revenues increased 15.3% year-over-year to $2.70 billion. Its gross profit rose 34.7% from the year-ago value to $734.73 million. Moreover, the company’s non-GAAP net income and non-GAAP earnings per common share grew 57.9% and 60.7% from the prior year's quarter to $270.26 million and $5.80, respectively.
Street expects EME's revenue and EPS for the fiscal 2024 fourth quarter that ended December 2024 to increase 10.7% and 28.8% year-over-year to $3.81 billion and $5.76, respectively. Furthermore, the company has surpassed the consensus EPS estimates in each of the four trailing quarters, which is noteworthy.
Shares of EME have surged 4.1% over the past six months and 47.6% over the past year, closing the last trading session at $398.03.
EME’s POWR Ratings reflect its robust prospects. The stock has an overall rating of B, translating to a Buy in our proprietary rating system.
EME has an A grade for Quality and a B for Growth. Within the A-rated Industrial - Services industry, it is ranked #7 out of 76 stocks.
To access EME’s Sentiment, Stability, Value, and Momentum ratings, click here.
Stock #1: MasTec, Inc. (MTZ)
MTZ is an infrastructure construction company that provides engineering, building, installation, maintenance, and upgrade services for communications, energy, utility, and other infrastructure. The company functions through five segments: Communications; Clean Energy and Infrastructure; Oil and Gas; Power Delivery; and Other.
For the fiscal 2024 third quarter that ended September 30, 2024, MTZ’s revenue amounted to $3.25 billion. Adjusted net income attributable to MTZ and adjusted EPS both rose 71.6% from the prior year’s quarter to $128.50 million and $1.63, respectively.
The company also announced its fiscal 2024 fourth quarter and full-year guidance. MTZ expects revenue of $3.33 billion and $12.23 billion for its fourth quarter and full year, respectively. Additionally, it anticipates a net income of $72 million for the quarter and $187 million for the full year.
The consensus revenue and EPS estimates of $3.32 billion and $1.22 for the fiscal 2024 fourth quarter that ended December 2024 reflect a year-over-year increase of 1.1% and 84.8%, respectively. Also, the company surpassed consensus EPS estimates in each of the four trailing quarters.
MTZ’s stock has surged 14.4% over the past nine months and 81% over the past year to close the last trading session at $128.36.
MTZ’s stable fundamentals are mirrored in its POWR Ratings. The stock has an overall rating of B, translating to a Buy in our proprietary rating system.
MTZ has a B grade for Growth and Quality. Within the Industrial - Services industry, it is ranked #15 out of 76 stocks.
Click here to access MTZ’s Momentum, Sentiment, Stability, and Value ratings.
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CAT shares rose $3.64 (+1.06%) in premarket trading Wednesday. Year-to-date, CAT has declined -5.28%, versus a 1.39% rise in the benchmark S&P 500 index during the same period.
About the Author: Aritra_Gangopadhyay
Aritra is a financial journalist dedicated to breaking down complex financial topics into simple, actionable insights. Holding a Master’s degree in Economics, he uses his analytical expertise to help investors uncover unique opportunities for long-term success.
3 Construction Stocks Set to Benefit from Infrastructure Spending StockNews.com
