Shares of Granite Construction Incorporated GVA reached a new 52-week high of $40.87 on Nov 27 and eventually closed a notch lower at $40.48. The stock price appreciation came on the back of strong third-quarter 2015 results, expected benefits from sound backlog and award wins.
The Watsonville, CA-based infrastructure contractor and construction materials producing company has a market cap of $1.6 billion. The stock has delivered a one-year return of about 14.7%. Average volume of shares traded over the last three months was approximately 233K.
Strengths of Granite Construction
The share price of Granite Construction reported its third-quarter results on Nov 2. Earnings per share of 77 cents marked a whopping 103% improvement year over year. Sales also jumped 4.4% year over year in the quarter reflecting solid execution and modest economic growth.
Moreover, the company’s total contract backlog increased 4% year over year to $3 billion in the reported quarter. Granite Construction will remain focused on execution of large project backlog along with bidding and winning additional new work.
Additionally, Granite Construction has partnerships in place and expects to bid on more than $16 billion of large projects between now and the end of 2016. Also, over the same period, the company expects to bid on projects worth $5 billion.
Further, plant efficiency remains the main focus for Granite Construction’s business. This is because operational success and continuous improvement in materials facilities have been driving the company’s cost-management gains.
For 2015, Granite Construction expects consolidated revenue growth in mid-single digits and consolidated EBITDA margin of 6% to 8%. The company will also benefit from economic improvement and increased demand. Notably, Granite Construction’s sound backlog and several additional awards bode well for its future performance.
Granite Construction currently has a Zacks Rank #4 (Sell).
Stocks to Consider
Some better-ranked stocks from the same sector are Dycom Industries Inc. DY, Jiangsu Expressway Co. Ltd. JEXYY and Zhejiang Expressway Co. Ltd. ZHEXY. While Dycom Industries sports a Zacks Rank #1 (Strong Buy), Jiangsu Expressway and Zhejiang Expressway hold a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment