Tutor Perini vs. KBR: Which Construction Stock is the Better Buy Now?

The demand for government and commercial infrastructure contracts is reaching its peak amid a favorable public spending backdrop, benefiting firms such as Tutor Perini Corporation TPC and KBR, Inc. KBR.The infrastructure market in the United States is driven by several federal and state funding initiatives, which are targeting the enhancement of public infrastructure and ensuring its sustainability. Moreover, the recent Fed rate cut of 0.25 percentage points, with expectations of two more rate cuts in the remainder of 2025, is catalyzing this entire process.Tutor Perini is mainly invested in grabbing onto higher-margin project opportunities, alongside executing selective bidding strategies to ensure long-term revenue visibility and profitability growth. On the other hand, KBR is gaining from its operations spread across diverse end markets and its aim to restructure its business model to ensure long-term value creation.Let’s dive deep and closely compare the fundamentals of the two stocks to determine which one is a better investment now.The Case for Tutor Perini StockThis California-based general contracting company is witnessing robust project wins, especially across its Civil and Building segments, because of the robust federal and state funding initiatives in the United States, especially with the optimism surrounding the Fed rate cuts. As of June 30, 2025, the company’s total backlog grew year over year by 102% to a record high of $21.1 billion.Since reporting its second-quarter 2025 results, Tutor Perini has secured several major contract awards, strengthening its backlog and revenue visibility. Its subsidiary, Lunda Construction Company, won a $60.2 million contract from Domtar Paper Company and a $19.7 million contract for the I-41 Bridges Project. Another subsidiary, Rudolph and Sletten, was chosen to build the new $960 million UCSF Benioff Children’s Hospital in Oakland, CA. Additionally, Five Star Electric received an electrical subcontract from Skanska/Railroad SPGF JV, while Fisk Electric Company won a $43.4 million contract for electrical services at the Cruise Terminal G Complex at the Port of Miami.Tutor Perini’s strategic bidding approach (seeking projects with limited competition, favorable contract terms and higher margins) is what is catalyzing growth in new project opportunities across mass transit, healthcare and other engineering projects. For the long term, the company remains optimistic about its strong backlog position. It expects to execute strategic bidding for various high-margin project opportunities in 2025 and beyond, which is anticipated to drive shareholder value.However, TPC is exposed to several operational and financial headwinds that could weigh on its future performance despite recent improvements in profitability and backlog growth. Broader macroeconomic and geopolitical factors, including tariffs, labor shortages and material cost inflation, have been affecting its project economics.The Case for KBR StockThis Texas-based global engineering, construction and services firm is gaining from its global reach position through diverse end markets. This business model is aiding the company in maintaining its revenue growth and cash flow position. As of July 4, 2025, KBR’s backlog and options were $21.57 billion, up 7.3% year over year from $20.1 billion and 4.8% from $20.58 billion as of fiscal 2024-end, with a trailing 12-month book-to-bill of 1.0x.Since its second-quarter fiscal 2025 earnings release, KBR has reported five contract wins, with a contract from NASA estimated at $2.459 billion. With the ongoing market demand trajectory toward lower emissions, product diversification, energy efficiency and more sustainable technologies and solutions, KBR’s performance is expected to see a continuous boost in the upcoming period. KBR expects the compounded annual growth rate (CAGR) of total revenues through 2027 to be more than 9%.Besides the market tailwinds, the company has announced a strategic restructuring move, which highlights the formation of two pure-play companies – New KBR, comprising the Sustainable Technology Solutions (STS) segment, and SpinCo, comprising the Mission Technology Solutions (MTS) segment. Per KBR, the two independent companies are expected to deliver long-term profitable growth and value for their customers, associates and shareholders through distinct product and service offerings.Despite favorable market conditions and strong internal initiatives, KBR faces risks from project delays and cost overruns. On June 18, 2025, its joint venture with Tier One Relocation, HomeSafe, was removed from the Global Household Goods Contract by the U.S. Transportation Command. As of the second quarter of fiscal 2025, KBR classified HomeSafe as discontinued operations, which is expected to negatively impact near-term revenue visibility and margins.Stock Performance & ValuationAs witnessed from the chart below, in the past six months, Tutor Perini’s share price performance stands significantly above KBR’s and the broader Construction sector.Image Source: Zacks Investment ResearchConsidering valuation, over the last five years, Tutor Perini has been trading above KBR on a forward 12-month price-to-earnings (P/E) ratio basis.Image Source: Zacks Investment ResearchOverall, from these technical indicators, it can be deduced that TPC stock offers an incremental growth trend but with a premium valuation, while KBR stock offers a declining growth trend with a discounted valuation.Comparing EPS Estimate Trends: TPC vs. KBRThe Zacks Consensus Estimate for TPC’s 2025 EPS indicates 220.8% year-over-year growth, with the 2026 estimate indicating an increase of 22.5%. The 2025 EPS estimates have remained unchanged over the past 60 days, while those of 2026 have moved up in the past 60 days.TPC's EPS TrendImage Source: Zacks Investment ResearchThe Zacks Consensus Estimate for KBR’s fiscal 2025 earnings estimates implies year-over-year growth of 12.9%, while the same for fiscal 2026 indicates an improvement of 11%. Its fiscal 2025 and fiscal 2026 EPS estimates have remained unchanged over the past 60 days.KBR's EPS TrendImage Source: Zacks Investment ResearchInvestors' Choice: Is It Time for TPC or KBR?Tutor Perini is capitalizing on record public infrastructure investments, supported by major contract wins across transportation, healthcare and civil construction. Its selective, high-margin bidding strategy enhances long-term profitability prospects. However, lingering headwinds, such as labor shortages, cost inflation and project execution risks, pose challenges despite improving fundamentals.Contrarily, KBR benefits from its diversified global end-market exposure and $21.6 billion backlog, supported by multi-billion-dollar government and sustainable technology contracts. Its planned spin-off of its Mission Technology Solutions segment by 2026 is expected to unlock shareholder value and sharpen business focus. Yet, project delays and the HomeSafe contract removal could weigh on near-term margins.Summing up, TPC stock offers stronger earnings momentum and near-term growth, while KBR stock provides diversification and long-term structural potential. Although both stocks are currently carrying a Zacks Rank #3 (Hold), TPC holds a modest near-term edge on execution momentum and backlog strength, making it a comparatively better investment option over KBR. 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(KBR): Free Stock Analysis Report Tutor Perini Corporation (TPC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks