Contrasting Sterling Infrastructure (NASDAQ:STRL) & Quanta Services (NYSE:PWR)

Sterling Infrastructure (NASDAQ:STRL) and Quanta Services (NYSE:PWR) are both construction companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, institutional ownership, dividends and risk.

Risk and Volatility

Sterling Infrastructure has a beta of 1.35, indicating that its stock price is 35% more volatile than the S&P 500. Comparatively, Quanta Services has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500.

Profitability

This table compares Sterling Infrastructure and Quanta Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sterling Infrastructure	13.33%	27.93%	11.18%
Quanta Services	3.73%	18.41%	7.15%

Earnings and Valuation

This table compares Sterling Infrastructure and Quanta Services”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sterling Infrastructure	$2.12 billion	4.15	$257.46 million	$9.20	31.38
Quanta Services	$23.67 billion	2.37	$904.82 million	$6.46	58.17

Quanta Services has higher revenue and earnings than Sterling Infrastructure. Sterling Infrastructure is trading at a lower price-to-earnings ratio than Quanta Services, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Sterling Infrastructure and Quanta Services, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sterling Infrastructure	0	0	2	0	3.00
Quanta Services	0	12	13	0	2.52

Sterling Infrastructure currently has a consensus price target of $355.00, indicating a potential upside of 22.97%. Quanta Services has a consensus price target of $397.18, indicating a potential upside of 5.70%. Given Sterling Infrastructure’s stronger consensus rating and higher probable upside, research analysts clearly believe Sterling Infrastructure is more favorable than Quanta Services.

Insider & Institutional Ownership

81.0% of Sterling Infrastructure shares are held by institutional investors. Comparatively, 90.5% of Quanta Services shares are held by institutional investors. 3.7% of Sterling Infrastructure shares are held by company insiders. Comparatively, 1.1% of Quanta Services shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Sterling Infrastructure beats Quanta Services on 9 of the 14 factors compared between the two stocks.

About Sterling Infrastructure

Sterling Infrastructure, Inc. engages in the provision of e-infrastructure, transportation, and building solutions primarily in the United States. It operates through three segments: E-Infrastructure Solutions, Transportation Solutions, and Building Solutions. The E-Infrastructure Solutions segment provides site development services for the blue-chip end users in the e-commerce distribution center, data center, manufacturing, warehousing, and power generation sectors. The Transportation Solutions segment is involved in the development of infrastructure and rehabilitation projects for highways, roads, bridges, airports, ports, rail, and storm drainage systems for the departments of transportation in various states, regional transit authorities, airport authorities, port authorities, water authorities, and railroads. The Building Solutions segment provides residential and commercial concrete foundations for single-family and multi-family homes, parking structures, elevated slabs, other concrete work for developers and general contractors, as well as provides plumbing services for residential builds. The company was formerly known as Sterling Construction Company, Inc. and changed its name to Sterling Infrastructure, Inc. in June 2022. Sterling Infrastructure, Inc. was founded in 1955 and is headquartered in The Woodlands, Texas.

About Quanta Services

Quanta Services, Inc. provides infrastructure solutions for the electric and gas utility, renewable energy, communications, and pipeline and energy industries in the United States, Canada, Australia, and internationally. The company’s Electric Power Infrastructure Solutions segment engages in the design, procurement, construction, upgrade, repair, and maintenance of electric power transmission and distribution infrastructure and substation facilities; installation, maintenance, and upgrade of electric power infrastructure projects; installation of smart grid technologies on electric power networks; and design, installation, maintenance, and repair of commercial and industrial wirings. This segment also offers aviation services; emergency restoration services; and other engineering and technical services; design and construction solutions to wireline and wireless communications, cable multi-system operators, and other customers; and training for electric workers, as well as training for the gas distribution and communications industries. The company’s Renewable Energy Infrastructure Solutions segment is involved in engineering, procurement, construction, repair, and maintenance of wind, solar, and hydropower generation facilities, as well as battery storage facilities; and provision of engineering and construction services for substations and switchyards, transmission, and other electrical infrastructures. The company’s Underground Utility and Infrastructure Solutions segment offers design, engineering, procurement, construction, upgrade, repair, and maintenance services for natural gas systems for gas utility customers; fabrication services for pipeline support systems and structures and facilities; and engineering and construction services for pipeline and storage systems, and compressor and pump stations. The company was formerly known as Fabal Construction, Inc. and changed its name to Quanta Services, Inc. in November 1997. The company was incorporated in 1997 and is headquartered in Houston, Texas.