Can Margin Gains Across Non-Pipeline Segments Drive MasTec's Growth?

MasTec, Inc. (MTZ) continues to focus on strengthening profitability through margin expansion across its non-pipeline segments. The company’s Communications, Power Delivery and Clean Energy & Infrastructure businesses have become central to its growth strategy, supported by rising demand in telecom, grid modernization and renewable energy. These areas are driving stronger execution and improved efficiency, positioning the company for sustained earnings growth beyond 2025.

In the second quarter of 2025, the company delivered notable margin improvement across these segments. Non-pipeline EBITDA rose 42% year over year to $257 million, supported by a 26% increase in revenues. Communications revenues grew 40%, Power Delivery advanced 20% and Clean Energy & Infrastructure nearly doubled EBITDA to $83 million, lifting segment margin by 240 basis points (bps) to 7.4%. Overall, non-pipeline margins improved 100 basis points year over year and 230 bps sequentially, reflecting higher productivity and operating leverage.

MasTec expects further sequential margin gains in the second half of the year, particularly within Communications and Power Delivery, with Clean Energy maintaining steady margins. The company raised its full-year 2025 EBITDA guidance to a range of $1.13 billion to $1.16 billion, driven largely by an expected 30% increase in non-pipeline performance.

Stronger execution, combined with a record backlog and healthy project pipeline, indicates that margin gains in these businesses could play a key role in MasTec’s next growth phase. The focus on operational discipline and diversified revenue streams reinforces the company’s long-term profitability outlook.

Peer Focus on Expanding Margins

Margin expansion has also been a key focus for infrastructure peers. EMCOR Group, Inc. (EME) and Sterling Infrastructure, Inc. (STRL) demonstrated improved profitability.

EMCOR delivered strong profitability in the second quarter of 2025. The company posted adjusted EPS of $6.72, up 28% year over year, supported by operating margin expansion of 50 bps to 9.6%. EMCOR attributed the gains to disciplined project execution and a favorable mix of work in data centers, healthcare and industrial markets. Remaining performance obligations of $11.9 billion increased 32% year over year, strengthening visibility into margin-driven growth.

Sterling Infrastructure also showed strong profitability in the second quarter of 2025, driven by higher margins and solid execution. Adjusted EPS rose 41% year over year to $2.69, while gross profit margin expanded 400 basis points to 23.3%, marking a new high for the company. The improvement reflected a shift toward higher-margin E-Infrastructure projects, including data centers and e-commerce facilities. Backed by this performance, Sterling Infrastructure raised its full-year 2025 adjusted EPS guidance to a range of $9.21-$9.47, up 8% at the midpoint.

MTZ Stock’s Price Performance & Valuation Trend

Shares of this Florida-based infrastructure construction company have surged 59.3% year to date, outperforming the Zacks Building Products - Heavy Construction industry’s 46.4% growth.

MasTec’s YTD Share Price Performance

MTZ stock is currently trading at a premium compared with its industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 29.29, as shown in the chart below.

EPS Trend of MTZ Stock

The Zacks Consensus Estimate for MTZ’s 2025 and 2026 earnings per share (EPS) implies a year-over-year uptick of 60% and 22.4%, respectively. The EPS estimates for 2025 and 2026 have remained unchanged in the past 30 days.

The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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