Sterling vs. Primoris: Which Infrastructure Stock is the Better Buy?

Both Sterling Infrastructure (STRL) and Primoris Services (PRIM) are capitalizing on robust U.S. public infrastructure spending, particularly in mission-critical areas like data centers. STRL reported a 44% year-over-year increase in its E-Infrastructure backlog to $1.2 billion and projects 45.9% EPS growth in 2025, though it trades at a premium valuation. Conversely, PRIM, with a larger $11.49 billion backlog and a substantial pipeline in data centers and solar projects, offers a discounted valuation and steadier multi-year growth, leading the analysis to favor PRIM as a more compelling buy despite STRL's faster near-term EPS growth.

Analysis

Both Sterling Infrastructure (STRL) and Primoris Services (PRIM) are strategically positioned to capitalize on strong secular demand in U.S. infrastructure, driven by mission-critical projects like data centers and power generation. Sterling is executing a focused pivot away from residential housing weakness toward high-growth E-Infrastructure, evidenced by a 44% year-over-year increase in this segment's backlog to $1.2 billion, which now constitutes 51% of total revenue. The company's total backlog reached $2.01 billion with an improved margin of 17.8%, and its near-term growth is further supported by the pending acquisition of CEC Facilities Group and a robust 45.9% EPS growth forecast for 2025. Conversely, Primoris operates on a significantly larger scale with a total backlog of $11.49 billion and is aggressively expanding from its utility and power generation base into the data center and renewables markets. PRIM is currently evaluating $1.7 billion in data center projects for 2025 contracts and has a long-term pipeline of $20-$30 billion in solar projects through 2028. Despite stronger recent share performance and a more attractive forward P/E valuation, PRIM's projected EPS growth of 20.7% for 2025 is more moderate than STRL's, presenting a classic growth-versus-value trade-off within the same industry.

Key Decisions for Investors

• Investors may find Primoris (PRIM) to be a compelling opportunity, given its discounted valuation relative to STRL, a substantially larger backlog, and significant long-term growth potential from its expansion into data center and renewable energy projects.
• For those prioritizing high near-term growth, Sterling (STRL) warrants consideration due to its aggressive 45.9% EPS growth forecast for 2025 and successful strategic focus on high-margin E-Infrastructure, though this comes at a premium valuation.
• Key indicators to monitor are the conversion of PRIM's $1.7 billion data center pipeline into firm contracts and STRL's ability to successfully integrate CEC Facilities Group to sustain its margin expansion and justify its current market premium.