Granite Construction (GVA): A Jet-Engine Opportunity in Airport Infrastructure

Investors, buckle up! Granite Construction (GVA) is about to take off—and I'm not just talking about runways. This company is at the center of a historic infrastructure boom, and its latest contracts at San Francisco International Airport (SFO) are the ignition spark you need to pay attention. Let's dive into why GVA isn't just a play on construction—it's a strategic bet on the future of U.S. mobility.

The SFO Contracts: A Runway to Profits

Granite's two SFO projects are no small potatoes. The $115 million rehabilitation of Runway 1R-19L and the new Taxiway W—the backbone of SFO's air traffic—are critical to maintaining the airport's status as a global gateway. Pair that with the $26 million Taxiway Z/S rehab, and you've got over $140 million in high-margin, shovel-ready work. But here's the kicker: these projects aren't just about paving asphalt. They're part of SFO's $7.3 billion Capital Improvement Program (CIP) through 2026, which is just one piece of the Biden administration's $1.2 trillion infrastructure bill.

This isn't just a regional play. SFO handles over 50 million passengers annually, and its modernization is a microcosm of the broader need to upgrade aging U.S. infrastructure. Granite's role here isn't just execution—it's strategic positioning to win future CIP contracts, which could total billions more.

Asphalt Goldmine: The Santa Clara Plant Advantage

Now, let's talk about Granite's secret weapon: its Santa Clara asphalt plant. The company isn't just a contractor—it's a vertically integrated powerhouse. For the SFO projects, Granite will supply 210,000 tons of asphalt (185k for the runway, 25k for Taxiway Z/S) from its own facility. This isn't just cost control—this is operational excellence.

Why does this matter? Vertical integration slashes reliance on third-party suppliers, reducing delays and price volatility. In an era of inflation and supply chain chaos, Granite's ability to self-source materials is a moat that competitors can't easily replicate. Plus, with the Biden infrastructure bill funneling cash to projects requiring “Buy America” compliance, Granite's local sourcing is a legal and logistical win.

Execution Excellence: Granite's Track Record Speaks Volumes

Cramer's Rule #1: Trust companies that deliver. Granite's project timelines are proof. The SFO runway work begins preconstruction in June 2025 (now!) and ramps up through 2026—on schedule. The Taxiway Z/S project, starting in August 2025, is a four-month sprint that Granite has already factored into its Q3 CAP backlog.

Remember, infrastructure projects are only as good as their execution. Granite's $5.7 billion CAP backlog (as of Q1 2025) isn't just a number—it's a war chest of confirmed revenue. And with a 99% on-time completion rate over the past decade, this company doesn't just promise—it delivers.

Why This Matters for Investors

Here's the math: The SFO contracts alone add roughly $140 million to Granite's top line, but the real value is in the network effect. Delivering for SFO builds credibility for future CIP projects, federal grants, and state-level infrastructure bids. Add in Granite's focus on sustainability (LED lighting, drainage upgrades, etc.), and you've got a company that's not just building roads—it's building the green infrastructure of tomorrow.

Risks? Yes—but They're Mitigated

Sure, construction projects face delays. But Granite's SFO contracts are critical path for an airport that can't afford downtime. The Biden infrastructure bill's funding deadlines also create urgency—SFO has to spend this money, and Granite is the proven partner. Plus, with asphalt prices rising, Granite's vertically integrated model insulates margins.

Buy Now—or Watch the Plane Take Off Without You

At current prices, Granite trades at just 10.5x forward earnings—a steal for a company with a $5.7B backlog and a pipeline fueled by federal spending. This is a buy-and-hold name for investors who want exposure to the infrastructure renaissance.

Action Plan: Use the dip (if it comes) to accumulate. If GVA's stock slips below $35, that's a buy signal. If it breaks through $40, don't chase—wait for a pullback. This is a stock to own for the next 3–5 years as the SFO projects roll out and Granite secures more CIP work.

Investors, Granite Construction isn't just paving runways—it's paving the way to outsized returns. Fasten your seatbelt: this stock is going to soar.

Final Take: BUY Granite Construction (GVA) for long-term infrastructure exposure. Current price: $38.25 (as of July 7, 2025).