NYSE:GVA

Stock Analysis Report

Executive Summary

Granite Construction Incorporated operates as an infrastructure contractor and a construction materials producer in the United States.

Rewards

Trading at 54.4% below its fair value

Earnings are forecast to grow 116.97% per year

Risk Analysis

Dividend of 1.84% is not well covered by earnings

Shareholders have been diluted in the past year



Snowflake Analysis

Adequate balance sheet and fair value.


Similar Companies

Share Price & News

How has Granite Construction's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: GVA has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

4.7%

GVA

4.2%

US Construction

1.5%

US Market


1 Year Return

-37.7%

GVA

17.5%

US Construction

20.1%

US Market

Return vs Industry: GVA underperformed the US Construction industry which returned 17.5% over the past year.

Return vs Market: GVA underperformed the US Market which returned 20.1% over the past year.


Shareholder returns

GVAIndustryMarket
7 Day4.7%4.2%1.5%
30 Day5.9%0.7%1.4%
90 Day6.9%4.2%8.7%
1 Year-36.8%-37.7%18.4%17.5%22.7%20.1%
3 Year-45.0%-47.0%9.4%7.0%50.1%40.5%
5 Year-15.9%-20.8%42.4%37.2%73.1%54.1%

Price Volatility Vs. Market

How volatile is Granite Construction's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Granite Construction undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: GVA ($28.33) is trading below our estimate of fair value ($62.08)

Significantly Below Fair Value: GVA is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: GVA is unprofitable, so we can't compare its PE Ratio to the Construction industry average.

PE vs Market: GVA is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate GVA's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: GVA is good value based on its PB Ratio (1.1x) compared to the US Construction industry average (1.8x).


Next Steps

Future Growth

How is Granite Construction forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

117.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: GVA is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.7%).

Earnings vs Market: GVA is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: GVA's is expected to become profitable in the next 3 years.

Revenue vs Market: GVA's revenue (4.6% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: GVA's revenue (4.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if GVA's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Granite Construction performed over the past 5 years?

-15.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: GVA is currently unprofitable.

Growing Profit Margin: GVA is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: GVA is unprofitable, and losses have increased over the past 5 years at a rate of -15.6% per year.

Accelerating Growth: Unable to compare GVA's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: GVA is unprofitable, making it difficult to compare its past year earnings growth to the Construction industry (2.4%).


Return on Equity

High ROE: GVA has a negative Return on Equity (-7.34%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Granite Construction's financial position?


Financial Position Analysis

Short Term Liabilities: GVA's short term assets ($1.5B) exceed its short term liabilities ($855.8M).

Long Term Liabilities: GVA's short term assets ($1.5B) exceed its long term liabilities ($514.7M).


Debt to Equity History and Analysis

Debt Level: GVA's debt to equity ratio (32.4%) is considered satisfactory.

Reducing Debt: GVA's debt to equity ratio has reduced from 34.3% to 32.4% over the past 5 years.


Balance Sheet

Inventory Level: GVA has a high level of physical assets or inventory.

Debt Coverage by Assets: GVA's debt is covered by short term assets (assets are 3.7x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: GVA has been profitable on average in the past, therefore cash runway is not a concern.

Forecast Cash Runway: GVA has been profitable on average in the past, therefore cash runway is not a concern.


Next Steps

Dividend

What is Granite Construction's current dividend yield, its reliability and sustainability?

1.84%

Current Dividend Yield


Dividend Yield vs Market

company1.8%marketbottom25%1.4%markettop25%3.7%industryaverage0.9%forecastin3Years1.8%

Current dividend yield vs market & industry

Notable Dividend: GVA's dividend (1.84%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: GVA's dividend (1.84%) is low compared to the top 25% of dividend payers in the US market (3.69%).


Stability and Growth of Payments

Stable Dividend: GVA's dividends per share have been stable in the past 10 years.

Growing Dividend: GVA's dividend payments have not increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: GVA is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: GVA's dividends in 3 years are forecast to be well covered by earnings (23.6% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

5.1yrs

Average management tenure


CEO

Jim Roberts (62yo)

9.4yrs

Tenure

US$4,126,623

Compensation

Mr. James Hildebrand Roberts, also known as Jim, has been the Chief Executive Officer and President of Granite Construction Incorporated since September 1, 2010 and as its Interim Chief Operating Officer s ...


CEO Compensation Analysis

Compensation vs Market: Jim's total compensation ($USD4.13M) is about average for companies of similar size in the US market ($USD3.76M).

Compensation vs Earnings: Jim's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
James Roberts
President9.4yrsUS$4.13m0.45% $5.8m
Jigisha Desai
Senior VP & CFO1.6yrsUS$1.06m0.097% $1.2m
Kyle Larkin
Executive VP & COO0yrsUS$871.19k0.018% $234.6k
James Richards
Senior VP & Group Manager of Heavy Civil7.1yrsUS$1.36m0.089% $1.1m
Lisa Curtis
Head of Investor Relations0yrsno datano data
M. Hall
Senior VP1.5yrsno datano data
Phillip DeCocco
Senior Vice President of Human Resources9.1yrsno datano data
Matthew Tyler
Senior VP & Group Manager of Federal5.1yrsno datano data
Richard Rantala
Senior Vice President of Business Development4.7yrsno datano data
Carlos Alegre
Senior Vice President of Operations Services0yrsno datano data

5.1yrs

Average Tenure

53.5yo

Average Age

Experienced Management: GVA's management team is seasoned and experienced (5.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
James Roberts
President9.4yrsUS$4.13m0.45% $5.8m
David Kelsey
Independent Director17.1yrsUS$240.11k0.073% $945.4k
Claes Bjork
Independent Chairman of the Board1.7yrsUS$337.80k0.15% $1.9m
David Darnell
Independent Director3yrsUS$215.99k0.0057% $73.8k
James Bradford
Independent Director14.1yrsUS$240.21k0.034% $441.2k
Patricia Galloway
Independent Director3yrsUS$215.99k0.011% $144.3k
Alan Krusi
Independent Director1.7yrsUS$165.08k0.010% $128.2k
Celeste Mastin
Independent Director3yrsUS$216.99k0.0057% $73.8k
Michael McNally
Independent Director4yrsUS$228.09k0.0070% $90.6k
Gaddi Vasquez
Independent Director7.3yrsUS$223.23k0.0043% $55.3k

3.5yrs

Average Tenure

64yo

Average Age

Experienced Board: GVA's board of directors are considered experienced (3.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: GVA insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 12%.


Top Shareholders

Company Information

Granite Construction Incorporated's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Granite Construction Incorporated
  • Ticker: GVA
  • Exchange: NYSE
  • Founded: 1922
  • Industry: Construction and Engineering
  • Sector: Capital Goods
  • Market Cap: US$1.288b
  • Shares outstanding: 45.48m
  • Website: https://www.graniteconstruction.com

Number of Employees


Location

  • Granite Construction Incorporated
  • 585 West Beach Street
  • Watsonville
  • California
  • 95076
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
GVANYSE (New York Stock Exchange)YesCommon StockUSUSDApr 1990
GRGDB (Deutsche Boerse AG)YesCommon StockDEEURApr 1990

Biography

Granite Construction Incorporated operates as an infrastructure contractor and a construction materials producer in the United States. The company operates through Transportation, Water, Specialty, and Materials segments. The Transportation segment engages in the construction and rehabilitation of roads, pavement preservation, bridges, rail lines, airports, and marine ports. The Water segment focuses on water-related construction and water management solutions, as well as provides trenchless cured-in-place pipe rehabilitation services. The Specialty segment constructs various complex projects, including infrastructure/site development, mining, public safety, tunnel, and power projects; and undertakes bid-build, design-build, and construction management/general contractor contracts. The Materials segment focuses on production of aggregates, asphalt, and construction related materials, as well as sanitary and storm water rehabilitation products, such as cured-in-place pipe felt and fiberglass-based lining tubes. The company also engages in the construction of streets, highways, mass transit facilities, trenchless and underground utilities, tunnels, dams, and other infrastructure-related projects. In addition, it performs site preparation and infrastructure services for residential development, energy development, commercial and industrial sites, and other facilities; and provides construction management professional services. The company serves federal agencies, state departments of transportation, local transit authorities, county and city public works departments, school districts and developers, utilities, contractors, landscapers, manufacturers of products requiring aggregate materials, retailers, homeowners, farmers, brokers, and private owners of industrial, commercial, and residential sites. Granite Construction Incorporated was founded in 1922 and is headquartered in Watsonville, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/16 23:40
End of Day Share Price2020/02/14 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.