WATSONVILLE, Calif. - Granite Construction Incorporated (NYSE:GVA), a major player in the construction sector, has secured a $25 million contract for retrofitting infrastructure at Ontario International Airport, announced Monday. This project is part of the company's first-quarter Capital Expenditure Program and is expected to begin in June 2024, with an anticipated completion date of August 2025.
The contract, awarded by McDonald Property Group, involves the retrofit of offsite infrastructure at the east end of the airport's runway to support the construction of nine logistics buildings, which will total over 4 million square feet. Granite's responsibilities include the upsizing and retrofitting of water, sewer, and storm drainage systems, as well as the construction of a reclaimed waterline, fire service lines, and dry utility systems. Additionally, the company will handle the reconstruction of streets, including the installation of curb & gutter, driveways, sidewalks, and street lighting.
Granite's selection for the Ontario Airport project was based on its qualifications and the ability to meet the accelerated schedule for delivering the first four buildings by the second quarter of 2025, according to Todd Besant, Granite Project Executive.
The initiative also aligns with Granite's strategic plan for the Desert Cities Region, expanding the company's geographical footprint into the Inland Empire and diversifying its project mix. The company has recently established an area office with views of the project site to advance its local market strategy, as stated by Bill Moore, Granite's Vice President of Regional Operations.
Granite, known as America's Infrastructure Company™, has been incorporated since 1922 and stands as one of the largest diversified construction and construction materials companies in the United States. The company prides itself on its ethical standards, safety leadership, and award-winning quality and sustainability practices.
InvestingPro Insights
As Granite Construction Incorporated (NYSE:GVA) embarks on the significant Ontario International Airport infrastructure project, the financial metrics and market sentiment around the company provide a broader context for investors. With a market capitalization of $2.74 billion, Granite Construction is a substantial player in the construction sector. The company's revenue growth has been robust, with a 12.9% increase over the last twelve months as of Q1 2024, and an even more impressive quarterly revenue growth of 20.03% in Q1 2024. This suggests a strong operational performance that may support its ambitious projects like the one at Ontario Airport.
However, with a P/E ratio of 76.5 and an adjusted P/E ratio of 40.2 for the last twelve months, the company is trading at a high earnings multiple, which could indicate that the stock is priced optimistically relative to its earnings. This is further supported by an InvestingPro Tip indicating that Granite Construction is trading at a high EBIT valuation multiple. Despite these valuations, the company's stock has seen a significant return over the last year, with a 63.72% total price return, and it is currently trading near its 52-week high, at 99.31% of that peak. This price performance reflects a strong market confidence in the company's prospects.
Investors might also consider the company's stability and commitment to shareholders, as evidenced by its track record of maintaining dividend payments for 35 consecutive years, with a current dividend yield of 0.85%. This consistency in returning value to shareholders could be appealing for those looking for steady income in addition to growth potential.
For those interested in a deeper dive into Granite Construction's financial health and future prospects, there are additional InvestingPro Tips available. For instance, analysts have predicted profitability for the company this year, which is corroborated by its positive net income growth expectation. Moreover, InvestingPro provides a fair value estimate of $55.79 for GVA, which investors can compare to the analyst target of $69 to gauge market sentiment.
To explore these insights in greater detail and access more exclusive analysis, investors can visit Investing.com/pro/GVA. With a total of 15 InvestingPro Tips available for Granite Construction, readers looking to make informed investment decisions can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, offering a comprehensive toolset for the discerning investor.
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