For Immediate Release

Chicago, IL – July 6, 2026 – Today, Zacks Equity Research discusses EMCOR Group, Inc. EME, MasTec MTZ, Dycom Industries DY and Tutor Perini Corp. TPC.

Industry: Heavy Construction

Link: https://www.zacks.com/commentary/2946886/4-infrastructure-driven-heavy-construction-stocks-to-buy-now

AI infrastructure and data center investments remain key growth drivers for the Zacks Building Products – Heavy Construction industry in 2026, supported by rising demand for cloud computing, AI workloads, fiber connectivity and utility upgrades. Strong federal and state funding for transportation, water and energy infrastructure, along with investments in grid modernization, power transmission, natural gas and industrial projects, is further expanding the industry's multiyear project pipeline and improving revenue visibility. Within this favorable backdrop, companies such as EMCOR Group, Inc., MasTec, Dycom Industries and Tutor Perini Corp. are well positioned, benefiting from diversified capabilities, technical expertise and disciplined execution.

However, persistent skilled labor shortages continue to constrain project execution, increase wage costs and intensify competition for qualified workers. At the same time, larger and more complex projects, inflationary pressures, evolving project scopes, permitting delays and funding uncertainties are placing greater pressure on margins, making disciplined bidding, cost control and execution increasingly important for sustaining profitability.

Industry Description

The Zacks Building Products - Heavy Construction industry consists of mechanical and electrical construction, industrial and energy infrastructure, as well as building service providers. This industry comprises heavy civil construction companies that specialize in the building and reconstruction of transportation projects, including highways, roads, bridges, airfields, ports and light rail. The companies serve commercial, industrial, utility and institutional clients.

The industry players are engaged in the engineering, construction and maintenance of communications infrastructure, oil and natural gas pipelines, as well as processing facilities for energy and utility industries. These firms are also engaged in mining and dredging services in the United States and internationally.

4 Trends Shaping the Future of the Heavy Construction Industry

AI Infrastructure & Data Center Demand Drive Growth: AI infrastructure remains one of the strongest tailwinds for the U.S. Heavy Construction industry in 2026. Rapid growth in cloud computing, AI workloads and digital transformation is fueling demand for data centers, which require large-scale site work, electrical systems, mechanical systems, cooling infrastructure, fiber connectivity and utility upgrades.

These projects are also expanding opportunities across adjacent areas such as grid connections, substations, concrete work and long-haul fiber networks. Rising demand for low-latency connectivity between data centers is further supporting telecom and fiber construction. Given the multiyear nature of these investments, contractors with scale, skilled labor and complex project execution capabilities are likely to benefit from strong backlog visibility and sustained bidding activity.

Infrastructure, Power & Energy Spending Stay Strong: Public infrastructure and energy-related construction remain major growth drivers for 2026. Federal and state spending continues to support highways, bridges, transit systems, airports, ports, water and wastewater projects. At the same time, rising electricity demand is driving investment in transmission lines, substations, grid hardening and reliability upgrades.

Energy security needs are also supporting natural gas, LNG, power generation and industrial infrastructure projects. These trends are creating a broad-based construction pipeline beyond data centers. Large public and energy projects typically span several years, giving the industry better revenue visibility. The combination of aging infrastructure, electrification, industrial reshoring and energy demand should keep project activity elevated through 2026.

Labor Shortages Remain a Key Constraint: Skilled labor availability remains one of the biggest headwinds for the U.S. heavy construction industry in 2026. Demand is rising across data centers, utilities, transportation, energy and public infrastructure at the same time, increasing competition for qualified workers. Large, complex projects require experienced electricians, mechanical workers, civil crews, project managers and safety professionals.

A tight labor market can limit how quickly contractors scale, delay project schedules and raise wage costs. Companies are investing more in training, recruitment and workforce development, but labor supply remains a structural issue. This is especially important as customers seek execution certainty on multiyear projects and may prefer contractors that can reliably secure skilled crews.

Project Complexity, Costs & Timing Pressure Margins: Despite strong demand, margin pressure remains a key industry headwind. Heavy construction projects are becoming larger and more complex, especially in AI infrastructure, power, transit and public works. These projects often involve evolving designs, changing scopes, tight schedules and coordination across several trades.

Contract mix can also affect profitability, as cost-plus, construction management and early-stage design projects may carry lower margins than traditional fixed-price work. Inflation in materials, equipment and subcontractor costs further increases the need for disciplined bidding and contract management. Permitting delays, funding approvals and customer timing decisions can also shift revenue recognition. As a result, execution discipline remains critical to converting strong demand into profitable growth.

Zacks Industry Rank Indicates Bright Prospects

The Zacks Building Products - Heavy Construction industry is a nine-stock group within the broader Zacks Construction sector. The industry currently carries a Zacks Industry Rank #38, which places it in the top 15% of more than 250 Zacks industries.

The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bullish near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

The industry’s positioning in the top 50% of the Zacks-ranked industries is a result of a higher earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually gaining confidence in this group’s earnings growth potential. Since April 2026, the industry’s earnings estimates for 2027 have increased to $11.26 per share from $11.06.

Before highlighting a few stocks worth considering for your portfolio, let’s first review the industry’s recent stock market performance and valuation trends.

Industry Outperforms Sector & the S&P 500

The Zacks Building Products - Heavy Construction industry has performed better than the broader Zacks Construction sector and the Zacks S&P 500 Composite over the past year.

Stocks in this industry have collectively gained 79% compared with the broader sector’s 22.8% rise. Meanwhile, the S&P 500 has jumped 22.9% in the said period.

Industry's Current Valuation

On the basis of the forward 12-month price-to-earnings ratio, which is a commonly used multiple for valuing heavy construction stocks, the industry is currently trading at 27.74X versus the S&P 500’s 21.13X and the sector’s 22.34X.

Over the past five years, the industry has traded as high as 28.44X, as low as 12.90X and at a median of 17.61X.

4 Heavy Construction Stocks to Buy Now

Here, we have discussed four stocks from the industry that have solid growth potential.

MasTec: Based in Coral Gables, FL, this is a leading infrastructure construction company operating mainly throughout North America. MasTec's growth outlook is supported by strong, long-duration infrastructure investment across multiple end markets. The company expects sustained demand from AI-driven data center construction and connectivity, electric grid modernization, power transmission, broadband expansion under the BEAD program, renewable energy, gas-fired power generation and natural gas pipeline infrastructure.

Record backlog, improving book-to-bill ratios and growing customer preference for turnkey project execution provide strong revenue visibility. Management also highlighted increasing opportunities in data center construction management, strategic acquisitions and expanding self-perform capabilities, positioning MasTec for sustained growth through 2026, 2027 and beyond.

MasTec, currently carrying a Zacks Rank #1 (Strong Buy), has gained 130.7% over the past year. Earnings estimates for 2026 have increased to $8.90 from $8.60 per share over the past 60 days. Earnings for 2026 are expected to grow 35.9% from a year ago. MTZ surpassed earnings estimates in all the trailing four quarters, with the average surprise being 15.4%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dycom: Headquartered in Palm Beach Gardens, FL, this is a specialty contracting firm operating in the telecom industry. Dycom's growth outlook remains strong, supported by accelerating investments in digital infrastructure and fiber connectivity. The company continues to benefit from expanding fiber-to-the-home deployments, rising long-haul and middle-mile fiber builds, and robust data center construction driven by hyperscale demand.

Management highlighted record backlog growth, longer-duration customer contracts that improve revenue visibility and geographic expansion across communications markets. The acquisition of National Technology Integrators further strengthens Dycom's data center and low-voltage capabilities while creating cross-selling opportunities. Additionally, the gradual rollout of the BEAD broadband program is expected to provide incremental growth from calendar 2027 onward, reinforcing the company's multiyear growth trajectory.

Dycom, currently carrying a Zacks Rank #1, has gained 90.4% over the past year. Earnings estimates for fiscal 2027 have increased to $16.35 per share from $15.94 per share over the past 30 days. The estimated value for fiscal 2027 is expected to increase 36.6% from the previous year. DY surpassed earnings estimates in all the trailing four quarters, with the average surprise being 25%. Again, it carries an impressive VGM Score of B.

EMCOR: Based in Norwalk, CT, EMCOR provides electrical and mechanical construction and related services in the United States and the United Kingdom. EMCOR has been gaining from sustained demand across mission-critical infrastructure markets and a record remaining performance obligation backlog that provides solid revenue visibility. T

he company continues to benefit from robust investments in AI-driven data centers, cloud infrastructure, healthcare, institutional facilities, water and wastewater projects, manufacturing and industrial construction, as well as the recovery in warehousing and logistics. Management also expects long-term growth from geographic expansion, disciplined acquisitions, expanded prefabrication capabilities, workforce development and increasing higher-margin service and maintenance work, while maintaining disciplined project execution and contract management.

EMCOR, currently carrying a Zacks Rank #1, has gained 48.5% over the past year. Earnings estimates for 2026 have increased to $29.37 per share from $28.99 per share over the past 30 days. Earnings for 2026 are expected to grow 13.5% from a year ago. EMCOR surpassed earnings estimates in three of the trailing four quarters and missed on one occasion, with the average surprise being 10.4%.

Tutor Perini: Based in Sylmar, CA, this company is a construction company serving public and private clients. Tutor Perini has been benefiting from its record $19.8 billion backlog (as of first-quarter 2026), including nine recently secured mega projects that provide multi-year revenue visibility. Management expects double-digit revenue growth in 2026 and even stronger earnings in 2027 as these higher-margin projects ramp up.

The company also sees a robust pipeline of large bidding opportunities across transportation, healthcare, military infrastructure, hospitality and gaming projects in the United States and the Indo-Pacific region. Incremental work on existing contracts, favorable macroeconomic tailwinds, disciplined bidding for higher-margin projects and strong public and private infrastructure funding further strengthen its long-term growth prospects.

Tutor Perini, currently carrying a Zacks Rank #2 (Buy), has gained 67.5% over the past year. Earnings estimates for 2026 have risen to $5.18 from $4.72 per share over the past 60 days. Earnings for 2026 are expected to grow 20.8% from a year ago. TPC surpassed earnings estimates in all the trailing four quarters, with the average surprise being 107.4%. Again, it carries an impressive VGM Score of A.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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EMCOR Group, Inc. (EME): Free Stock Analysis Report

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MasTec, Inc. (MTZ): Free Stock Analysis Report

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