construction and engineering companies poised for growth with continued infrastructure investments infrastructure includes but is not limited to roads railways airports public transit and other major projects as part of president biden’s “build back better” agenda the infrastructure investment and jobs act focuses on investments in physical infrastructure the senate approved this bipartisan bill in a 6930 vote but the house of representatives will not take up legislation until the senate passes a separate 35 trillion budget resolution including priorities such as immigration and childcare this package calls for 550 billion in new spending over the next five years spending will be primarily financed through unspent emergency relief funds for the coronavirus pandemic as well as strengthened taxes on cryptocurrencies the congressional budget office cbo estimates that the plan will add about 256 billion to projected deficits over the next decade the goals of this act include improving and modernizing transportation repairing roads and bridges reducing carbon emissions investments in electric vehicles increasing internet accessibility and delivering clean drinking water to 10 million families and disadvantaged communities when analyzing a company it is useful to have an objective framework that allows you to compare companies in the same way this is one reason why aaii created the a stock grades which evaluate companies across five factors that have been shown to identify marketbeating stocks in the long run value growth momentum earnings estimate revisions and surprises and quality using a stock grades the following table summarizes the attractiveness of three construction and engineering stocks—granite construction installed building products and myr group—based on their fundamentals aaii’s a stock grade summary for three construction and engineering stocks granite construction operates as an infrastructure contractor and a construction materials producer in the us the company operates through transportation water specialty and materials segments the transportation segment engages in the construction and rehabilitation of roads pavement preservation bridges rail lines airports and ports the water segment focuses on waterrelated construction and water management solutions as well as storm water rehabilitation services the specialty segment constructs various complex projects including infrastructuresite development mining public safety tunnel and power projects and undertakes bidbuild designbuild and construction contracts the materials segment focuses on production of aggregates asphalt and constructionrelated materials as well as sanitary and storm water rehabilitation products such as curedinplace pipe felt and fiberglassbased lining tubes the company serves federal agencies state departments of transportation local transit authorities county and city public works departments retailers homeowners farmers brokers and private owners of industrial commercial and residential sites the company has been fortunate to receive many contracts particularly within the western us these contracts include millions of dollars to redevelop or rehabilitate motorways airports interchanges and roads with most awarded projects coming from the transportation and specialty segments committed and awarded projects cap were up 280 million year over year aiding granite construction in reporting revenues of 964 million dominated by transportation revenue of 525 million over the last month the consensus earnings estimate for the third quarter has increased from 088 to 0944 per share based on three revisions two upward revisions and one downward granite construction has a momentum grade of b based on its momentum score of 76 and a weak growth grade of d granite construction has a 13 dividend yield installed building products ibp provides installation of insulation waterproofing firestopping fireproofing garage doors rain gutters window blinds closet shelving and mirrors shower doors and other products for the new residential construction market in the us the company is also involved in installing caulk and sealant products commercially and residentially for basements crawl spaces and attics as well as moistureprotection systems the market is uncertain due to rising costs for homebuilding the building products supply chain is still strained impacting the ability to purchase certain materials however the company reported record revenues net income and earnings per share in the second quarter compared to the same quarter one year ago the company acquired a colorado company that installs drywall framing ceiling tiles and firestopping for commercial customers as well as a louisianabased mirror and glass installation company within the quarter earnings estimate revisions offer an indication of what analysts are thinking about the shortterm prospects of a firm the company has an earnings estimate revisions grade of c which is considered neutral the grade is based on the statistical significance of its last two quarterly earnings surprises and the percentage change in its consensus estimate for the current fiscal year over the past month and past three months installed building products has a value grade of d based on its value score of 61 which is considered expensive the company’s value score ranking is high across several traditional valuation metrics with a score of 72 for the pricetofreecashflow ratio 28 for shareholder yield and 40 for the pricetosales ratio remember the lower the score the better for value successful stock investing involves buying low and selling high so stock valuation is an important consideration for stock selection the value grade is the percentile rank of the average of the percentile ranks of the valuation metrics mentioned above along with the priceearnings pricetobook and enterprisevaluetoebitda ratios installed building products has a momentum grade of c based on its momentum score of 52 this means it ranks in the middle tier of all stocks in terms of its weighted relative strength over the last four quarters the weighted fourquarter relative strength rank is the relative price change for each of the past four quarters myr group myrg is a holding company that through its subsidiaries provides electrical construction services in the us and canada it operates in two primary segments transmission  distribution td and consumer  industrial ci the td segment offers a range of services on electric transmission and distribution networks as well as substation facilities including design engineering procurement construction upgrade maintenance and repair services it services highvoltage transmission lines and substations and lowvoltage under and overground distribution systems this segment serves as a prime contractor to customers such as investorowned utilities governmentfunded utilities private developers independent power producers independent transmission companies industrial facility owners and other contractors the ci segment provides services such as design installation maintenance and repair of commercial and industrial wiring as well as installation of traffic networks bridges roadways and tunnel lighting this segment offers its services for airports hospitals data centers hotels stadiums convention centers renewable energy projects manufacturing plants processing facilities wastewater treatment facilities mining facilities and transportation control and management systems the company reported record quarterly revenues and net income of 650 and 21 million respectively compared to the same quarter a year ago several market drivers provide future growth opportunities including grid modernization electrification and clean energy myr group is focused on strategies to expand customer relations innovative practices and capitalize on market opportunities myr group has an average a growth grade of b the growth grade considers both the near and longerterm historical growth in revenue earnings per share and operating cash flow the company has exhibited strong sales growth over the past year sales increased 267 year over year for the threemonth period ending june 30 2021 to 650 million while diluted earnings per share grew 552 myr group currently does not pay a dividend a higherquality stock possesses traits associated with upside potential and reduced downside risk backtesting of the quality grade shows that stocks with higher quality grades on average outperformed stocks with lower grades over the period from 1998 through 2019 myr group has a quality grade of a putting it in the top tier among all uslisted stocks the a quality grade is the percentile rank of the average of the percentile ranks of return on assets roa return on invested capital roic gross profit to assets buyback yield change in total liabilities to assets accruals z double prime bankruptcy risk z score and fscore the score is variable meaning it can consider all eight measures or should any of the eight measures not be valid the valid remaining measures to be assigned a quality score though stocks must have a valid nonnull measure and corresponding ranking for at least four of the eight quality measures the company ranks highly in terms of its return on assets and fscore ranking in the 81st and 86th percentile of all uslisted stocks respectively however it ranks poorly in terms of its change in buyback yield putting it in the 50th percentile myr group has a momentum grade of a based on its momentum score of 85 the stocks meeting the criteria of the approach do not represent a “recommended” or “buy” list it is important to perform due diligence if you want an edge throughout this market volatility become an aaii member