The United States energy, power and telecommunications market is booming on the back of incremental public spending initiatives undertaken by the government. Moreover, opportunities linked to Artificial Intelligence (AI) are further driving the growth prospects for the companies operating in these infrastructure markets, like Dycom Industries, Inc. DY and MasTec, Inc. MTZ.
Amid the ongoing favorable market trends, the lowering of the interest rate by the Federal Reserve is a welcome addition for the firms operating in the infrastructure and engineering/construction space. On Dec. 10, 2025, the Federal Reserve slashed its interest rates by another 0.25 percentage points, setting the benchmark between 3.5% and 3.75%. After these cuts, the Federal Open Market Committee, or FOMC, is now expecting only one rate cut in 2026, with another one anticipated in 2027. The reduction in borrowing rate catalyzes the ongoing favorable market trends, boosting more project initiations and leading to a promising future.
Dycom is a specialty contracting firm operating in the telecom industry, gaining from opportunities across fiber and digital infrastructure, backed by increased data center projects. Conversely, MasTec is an infrastructure construction company, engaging in the engineering, building, installation, maintenance and upgrade of energy, communication, utility and other infrastructure.
Let’s dive deep and closely compare the fundamentals of the two infrastructure stocks to determine which one is the better investment now.
Dycom has been witnessing exceptional growth in digital infrastructure linked to AI. Hyperscalers continue to increase capital spending to support data-heavy applications and AI workloads. This requires upgrades to existing routes and the construction of new connections across data centers. In the third quarter of fiscal 2026, the company reiterated that outside-plant data center network construction is set to ramp meaningfully, with major activity expected to build through calendar 2026 and show substantial growth in 2027. These prospects favor the company’s long-term growth, given its expertise in handling highly complex and large-scale builds.
Moreover, rising demand across the telecommunications market is also driving prospects for Dycom, with primary growth drivers being fiber-to-the-home programs, wireless activity and fiber infrastructure work for hyperscalers. As of October 2025, DY’s total backlog grew 4.7% year over year to $8.22 billion, with the next 12-month backlog rising 11.4%.
Apart from the ongoing demand tailwinds, the long-term prospects of Dycom seem promising thanks to the optimism surrounding the Broadband Equity, Access and Deployment (BEAD) program. The program represents a significant multi-year catalyst, with $29.5 billion in expected state and territory spending and approximately $26 billion directed specifically toward fiber or HFC infrastructure, an area directly aligned with DY’s core capabilities. The company’s early positioning appears strong, as it has already secured more than $500 million in verbal BEAD-related awards, none of which are yet included in backlog, suggesting substantial upside as states convert awards to contracts. This trend is paving the way for new contracts, project starts and meaningful revenue contribution beginning in Dycom’s second quarter of fiscal 2027.
Amid a challenging macroeconomic environment and risks related to tariffs, DY remains optimistic about its mid and long-term prospects. Owing to this optimism, in fiscal 2026, Dycom now expects total contract revenues in the range of $5.350-$5.425 billion (prior expectation was $5.290-$5.425 billion), representing a 13.8-15.4% year-over-year increase.
MasTec is benefiting from strong activity across communications, clean energy and power delivery markets. Besides, a record backlog highlighted persistent demand tied to energy transition and infrastructure investment. As of Sept. 30, 2025, the company’s 18-month backlog stood at a record level of $16.78 billion, up 21.1% year over year and 2% sequentially. MasTec offers services for renewables projects through its Clean Energy and Infrastructure segment, whose 18-month backlog grew 21.4% year over year on strong renewables demand, mainly solar.
After going through a rough patch since the start of 2025, MasTec’s Pipeline Infrastructure segment’s revenues grew 20% year over year to $597.8 million, with EBITDA margin showing sequential growth of 390 basis points to 15.4%. Increasing multi-year spending across grid reliability, LNG expansion and energy transition infrastructure is driving the momentum. Also, MTZ’s improved bidding discipline, a more favorable mix of midstream projects, better project execution and healthier backlog conversion are boding well amid favorable government funding initiatives.
Despite thriving in the energy and power markets, MasTec is facing several challenges that are impacting its revenue visibility and margin growth. It has been experiencing performance setbacks due to fluctuations in capital spending, alongside being continuously subject to project delays.
During the third quarter of 2025, MTZ toned down the 2025 revenue guidance for its Power Delivery segment to about $4.075 billion from the prior expected range of $4.225-$4.25 billion. This move was undertaken because of a lower level of activity related to its Greenlink project, as the customer is facing isolated delays due to permitting.
As witnessed from the chart below, in the past six months, Dycom’s share price performance has outperformed MasTec’s growth and the broader Construction sector.
Image Source: Zacks Investment Research
Considering valuation, over the last five years, MasTec has been trading above Dycom on a forward 12-month price-to-earnings (P/E) ratio basis.
Image Source: Zacks Investment Research
Overall, from these technical indicators, it can be deduced that DY stock offers an incremental growth trend with a discounted valuation, while MTZ stock offers a diminishing growth trend with a premium valuation.
The Zacks Consensus Estimate for DY’s fiscal 2026 EPS indicates 26.9% year-over-year growth, with the fiscal 2027 estimate indicating a rise of 35%. The fiscal 2026 and fiscal 2027 EPS estimates have moved upward over the past 30 days.
The Zacks Consensus Estimate for MTZ’s 2025 earnings implies a year-over-year rise of 61.5%, while the same for 2026 indicates an uptick of 27.3%. Its 2025 and 2026 EPS estimates have trended upward over the past 60 days.
Dycom’s trailing 12-month ROE of 22.2% significantly exceeds MasTec’s average, underscoring its efficiency in generating shareholder returns.
Image Source: Zacks Investment Research
The U.S. infrastructure spending cycle remains supportive for engineering and specialty contractors, aided by AI-driven digital infrastructure demand and easing monetary conditions. Dycom stands out as a pure-play beneficiary of fiber, wireless and data-center network expansion tied to hyperscalers and AI workloads. A growing backlog, improving 12-month visibility and early traction from the BEAD program provide strong multi-year revenue tailwinds.
MasTec, on the other hand, benefits from broad exposure to energy transition, renewables, pipelines and power delivery, supported by a record backlog. While profitability in its Pipeline Infrastructure segment is improving, project delays and capital-spending variability continue to cloud near-term visibility, as reflected in reduced Power Delivery guidance. Its premium valuation and more uneven execution temper upside.
Notably, Dycom, which currently sports a Zacks Rank #1 (Strong Buy), trades at a relatively discounted valuation despite accelerating growth prospects, enhancing its investment appeal. Moreover, its upward earnings estimate revision for fiscal 2026 and 2027 and a higher ROE underscore execution strength and capital efficiency.
Overall, DY stock offers clearer growth visibility, stronger execution and superior risk-adjusted upside compared with MTZ stock, which currently carries a Zacks Rank #3 (Hold), indicating a comparatively better investment option now. You can see the complete list of today’s Zacks #1 Rank stocks here.
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Dycom Industries, Inc. (DY) : Free Stock Analysis Report
MasTec, Inc. (MTZ) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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