Granite & Kraemer Joint Venture Awarded $113M Infrastructure Project in Michigan
A groundbreaking collaboration between the Granite Construction Incorporated and Kraemer North America, known as GKJV-II, has been handpicked by the Michigan Department of Transportation (“MDOT”) to replace the aging Lafayette Bascule Bridge. This monumental project comes with an approximated budget of $113 million, the fiscal responsibility of which will be shared by the Federal Highway Administration and the MDOT.
Project Scope and Timeline
The expansive project contract outlines several critical objectives. These are inclusive of the demolition of the current structure, along with a complete reinstallation of the cofferdam. Other key tasks involved consist of creating new substructures and bascule piers, structural steel, machinery, approach spans, and the bridge house. Albeit the final project timeline confirmation is still pending, reports suggest that the endeavor is slated to commence in the fall of 2024 and see a final wrap by the summer of 2027. The project value is expected to find inclusion in Granite’s second-quarter 2024 Committed and Awarded Projects (“CAP”).
A Boost for Granite’s Growth Prospects
This prestigious assignment acts as a catalyst to Granite’s focus on bolstering its high-quality CAP portfolio. The endeavor comes on the back of a positive public funding environment and the resilience displayed by the private market. During the first quarter of 2024, Granite’s total CAP reached a sterling balance of $5.5 billion; this was a 7.7% increase year-over-year, driven by robust public and private work environments across multiple geographies.
An array of opportunities presented by the Federal Infrastructure Bill adds impetus to this growth trajectory. Granite is purposefully channeling its energies towards best-value projects; these represented $2.5 billion or 46% of the company’s total CAP as of the closure of Q1 2024. Under the construction segment, the California group’s CAP was $2.4 billion, which is a 26% increase from the previous year.
Granite’s Market Performance
Over the past year, shares of the civil construction company and the aggregate producer surged 45.8%, sticking close to the gain of 46% that was demonstrated by the Building Products – Heavy Construction industry. The company’s unflinching commitment towards operational excellence and strategic decision-making, particularly within its construction and materials segments, is expected to drive its consistent growth in the future.
Key Picks in the Construction Sector
Meanwhile, investors in the construction sector have four lucrative stocks to explore. These include Advanced Drainage Systems, Inc., which currently boasts a Zacks Rank #1 (Strong Buy) and has delivered a four-quarter average earnings surprise of 30.5%. Its share price has surged 31.2% over the past year.
The second key pick, Arcosa, Inc., shares the same Zacks Rank as Advanced Drainage Systems and has an impressive four quarter average earnings surprise of 43.9%. ACA’s shares grew by 8% in the past year.
Lastly, we have the Fluor Corporation which also sports a Zacks Rank of 1. FLR maintains a strong presence in the sector with a trailing four-quarter earnings surprise of 51.3% on average, coupled with stock growth of 44.2% in the past year.
