Granite Construction (GVA) Wins $73M CM/GC Deal From PRWUA
Granite Construction Incorporated GVA secured a $73-million Construction Manager/General Contractor (CM/GC) contract from the Provo River Water Users Association (PRWUA). The contract aims at fortifying and modernizing the Deer Creek Dam & Reservoir in Heber Valley, Utah. The project, which started in May, is expected to be completed in March 2026.
GVA is tasked with adding a bypass intake to the existing infrastructure, enabling PRWUA to temporarily shut down the existing intake for the first time since construction. This facilitates the rehabilitation of the existing guard gates. The project equips the system to draw water from two elevations, ensuring high water quality for the river below the dam, even if water conditions change.
GVA's commitment to Utah's growth and well-being is evident as the company uses its expertise to enhance the Deer Creek Dam & Reservoir, ensuring a dependable water supply, preserving recreational opportunities, and contributing toward the region's economic sustainability.
Solid CAP Synergies
The performance of Granite’s operating segments showcased strong market growth in second-quarter fiscal 2023, benefiting from a robust public funding environment, with California leading the way. Committed and Awarded Projects (CAP) reached $5.4 billion in the second quarter, a sequential increase of $334 million and year-over-year growth of $1.2 billion. Despite unfavorable weather conditions, the company's strategic approach of selective bidding resulted in increased margins and a higher number of projects won in the quarter.
During the fiscal second quarter, the California unit reported CAP of $2.35 billion, up 22.6% sequentially and 43.9% from the prior-year quarter. Despite budget challenges, bidding activity in the state remained robust, driven by the Federal Infrastructure Bill. The bill presented a range of opportunities.
Price Performance
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Shares of GVA rose 41.5% in the past year compared with the Zacks Building Products - Heavy Construction industry’s 43.1% growth. Although its shares have underperformed the industry, consistent contract wins will enable GVA to gain momentum in the upcoming period.
Zacks Rank & Key Picks
Granite Construction currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Zacks Construction sector are:
Boise Cascade Company BCC sports a Zacks Rank #1 (Strong Buy). BCC has a trailing four-quarter earnings surprise of 25.5% on average. Shares of BCC have gained 75.5% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for BCC’s 2023 sales and earnings per share (EPS) indicates a decline of 20.1% and 45.5%, respectively, from the year-ago period’s levels.
EMCOR Group, Inc. EME flaunts a Zacks Rank #1. It has a trailing four-quarter earnings surprise of 17.2%, on average. Shares of EME have risen 90.2% in the past year.
The Zacks Consensus Estimate for EME’s 2023 sales and EPS suggests growth of 11.5% and 35.9%, respectively, from the year-ago period’s levels.
TopBuild Corp. BLD flaunts a Zacks Rank #1. It has a trailing four-quarter earnings surprise of 14.1%, on average. Shares of BLD have surged 60.7% in the past year.
The Zacks Consensus Estimate for BLD’s 2023 sales and EPS indicates gains of 3.3% and 6.1%, respectively, from the year-ago period’s levels.
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