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MasTec Wins $500M MSA From PREPA to Restore Electric Supply

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MasTec, Inc. (MTZ - Free Report) recently signed a master services agreement (“MSA”) with the Puerto Rico Electric Power Authority ("PREPA") for approximately $500 million. Per the MSA, MasTec will complete the restoration of the critical electrical transmission and distribution system components which were damaged by the Hurricane Maria. The scope of work also entails providing support for the initial phase of reconstruction and modernization of the electrical power system in Puerto Rico.

The Hurricane Maria, which hit Puerto Rico in September 2017, had wreaked havoc in the island. The tropical storm damaged PREPA’s aging electrical grid. The island is still facing lack of access to electricity and clean water.

Per the deal, MasTec will assist in the power reconstruction and restoration efforts in Puerto Rico, as well as improve electric utility infrastructure. The company will also work with the Commonwealth of Puerto Rico, PREPA, and various other federal and Commonwealth agencies in the transition to upgrading and modernizing the power grid.

Work under the contract is expected to complete over the next 12 months. The contract will likely aid MasTec’s backlog strength. Prior to this, the company had secured a large project pipeline construction award for more than $1.5 billion in October 2017.

At the end of first-quarter 2018, the company’s 18-month backlog reached a record $7.6 billion, an increase of 33% from the prior-year quarter end. Driven by the record backlog and solid demand for its services across multiple markets, the company anticipates delivering a stellar performance in 2018.

Notably, the stock has rallied 14% in a year’s time, higher than the S&P 500’s gain of 12%. Also, MasTec has outperformed 11% growth recorded by the industry during the same time frame.



 

Zacks Rank & Other Stocks to Consider

MasTec currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the same sector are Installed Building Products, Inc. (IBP - Free Report) , PGT, Inc. and Sterling Construction Company Inc (STRL - Free Report) . While Installed Building Products and PGT flaunt a Zacks Rank of 1, Sterling Construction carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Installed Building Products has a long-term earnings growth rate of 30%. The stock has rallied 21% in a year’s time.

PGT has a long-term earnings growth rate of 19.3%. Its shares have appreciated 78% over the past year.

Sterling Construction has a long-term earnings growth rate of 11%. The company’s shares have gained 28% during the past year.

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