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MasTec, Inc. MTZ is currently trading at a forward 12-month Price/Earnings ratio (P/E F12M) of 22.06, a roughly 25.2% premium to the Zacks Building Products - Heavy Construction industry average of 17.62, and higher than its five-year median.
This Coral Gables, FL-based leading infrastructure construction company’s solid backlog, strong financial management and focus on high-growth sectors like clean energy and communications provide a strong foundation for growth. Yet, the company’s relatively expensive valuation raises concerns about whether the stock's valuation is justified, given the potential impacts of policy changes proposed by President Donald Trump.
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MTZ stock appears overvalued, especially when compared to other peer companies like AECOM ACM, Fluor Corporation FLR and EMCOR Group, Inc. EME, all lower than MasTec. ACM, FLR and EME have a forward P/E of 17.66, 14.93 and 17.29, respectively.
MasTec Stock Outperforms Industry
Considering the share price performance, MTZ stock has dropped 5.5% so far this year amid macroeconomic concerns related to Trump’s policy changes, tariff imposition and high inflation. This compares with the broader Construction sector’s 4.9% drop and the Zacks S&P 500 Composite’s decline of 2.4% in the same period.
Nonetheless, MTZ stock has outperformed the industry, and its Value Score of B suggests that it is a strong value proposition at current levels.
MasTec’s YTD Price Performance
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MasTec stock is trading above its 200-day simple moving average (SMA), indicating solid long-term momentum. However, it is below its 50-day SMA, reflecting near-term volatility.
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Let’s discuss MasTec’s potential tailwinds that can drive the stock higher in the near term.
Decoding MasTec’s Tailwinds
Trump’s "National Energy Emergency" & "Unleashing American Energy": President Donald Trump's energy policies, summarized by "Unleashing American Energy" and the "National Energy Emergency," represent a significant shift toward prioritizing fossil fuel expansion, deregulation and energy independence. Political discussions around energy security and grid reliability have intensified, adding urgency to these projects. This highlights the bipartisan push for infrastructure upgrades. MasTec’s positioning as a key contractor for power grid development enabled it to capitalize on these trends, securing long-term contracts that will support continued revenue expansion.
Utilities across the United States are increasing capital spending on transmission lines, substations and distribution networks to handle growing energy demand. A combination of federal incentives, regulatory support and corporate investments in renewable energy integration further strengthened the sector’s growth trajectory, benefiting MasTec.
Growing Demand for Data Centers: The accelerating expansion of data centers is emerging as a key growth driver, boosting demand for power infrastructure and fiber connectivity. MasTec has already secured more than $200 million in data center-related revenues in 2024, with expectations for further growth in 2025. The surge in artificial intelligence, cloud computing and high-performance data storage is fueling substantial investments in new facilities, each requiring extensive electrical and fiber-optic infrastructure. As companies push for swift digital infrastructure deployment, MasTec is well-positioned to capitalize on this trend.
Bullish About Pipeline Business: While most of MasTec’s business segments showed strong growth, the Pipeline Infrastructure division faced headwinds in the fourth quarter of 2024. Despite the short-term slowdown, MasTec is optimistic about the long-term prospects of this business. The demand for gas-fired power generation is rising, leading to an increased need for natural gas pipelines. The company expects pipeline revenues in 2026 to exceed 2024 levels as new projects come online. With Trump’s policies favoring fossil fuel expansion, such as approving pipelines and increasing domestic drilling, MasTec could see heightened demand for pipeline construction, processing facilities and maintenance contracts.
Solid Backlog Growth: MasTec ended the fourth quarter of 2024 with an 18-month backlog of $14.3 billion, a record high for the company. The backlog increased sequentially in every segment, reflecting strong customer demand and a robust project pipeline heading into 2025. The ability to secure new contracts across multiple infrastructure verticals has reinforced MasTec’s long-term growth potential.