Compare heavy-construction stocks by first separating equipment manufacturers from contractors and materials producers, then examining backlog, margins, and debt using each company’s own definitions. These figures are not standardized across the industry: a machine maker’s construction-segment margin and a contractor’s company-wide margin do not describe the same economics.
Start by defining the peer group
“Construction stocks” can mean businesses with very different sources of revenue and risk. Caterpillar sells machinery through several businesses, including Construction Industries; Deere reports Construction & Forestry alongside other segments; Granite Construction executes infrastructure projects and produces construction materials. Compare businesses with similar models where possible, and identify the segment behind each figure when companies are diversified. Caterpillar’s 2025 Form 10-K, Deere’s 2025 Form 10-K and Granite’s 2025 Form 10-K describe these distinct business mixes.
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- Equipment manufacturers: Sell machinery and may also provide customer financing.
- Project contractors: Earn revenue as they perform contracted work; costs, estimates and payment terms affect results.
- Materials producers: Sell inputs such as aggregates, sometimes alongside contracting operations.
This is a framework for organizing comparisons, not a universal scorecard. Company filings do not establish one standardized industry definition or benchmark for backlog, margin or debt.
Compare backlog by definition, quality and conversion
Do not assume that two companies’ backlog figures measure the same thing. Granite says companies in its industry define and measure backlog differently. It defines its own backlog as unearned revenue expected on executed contracts, and explains that the amount can change with work completed, new contracts, estimated quantities, changed conditions, change orders, penalties and incentives. Granite also cautions that backlog may not be realized, may not be profitable and may not accurately represent future revenue. Granite’s 2025 Form 10-K
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For each issuer, record the reporting date, stated definition and any conditions attached to the figure. Then assess the evidence that work will turn into revenue—and whether it may earn an acceptable return:
- Does the figure represent executed contracts, awards, options or another category?
- What does the company disclose about funding, cancellation rights, timing and possible scope changes?
- Are projects or customers concentrated, and how quickly has backlog historically converted to revenue?
- What execution risks, contract economics or cost changes could affect profitability?
Granite reported $6.969 billion in Construction Activities Program backlog at December 31, 2025. The company’s figure includes unearned revenue and other awards under its own definition; it should not be treated as directly equivalent to another issuer’s backlog. Granite’s 2025 Form 10-K
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Make margin comparisons like for like
Before comparing percentages, identify the margin type and the business it covers. Gross margin, operating margin and adjusted operating margin answer different questions; so do consolidated results and segment results. Caterpillar reports multiple segments, and its earnings release presents both company-wide and Construction Industries results. Deere also reports Construction & Forestry as one segment among several. A construction segment at a manufacturer should not be ranked against a contractor’s consolidated margin as if the measures were interchangeable. Caterpillar’s 2025 results · Deere’s 2025 Form 10-K
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Read contractor margins alongside project execution
Contractor results can shift as projects progress and estimates change. Granite says revenue, gross profit and operating cash flow can vary substantially between periods because of project progression, outstanding change orders and claims, and contract payment terms. When evidence indicates that a contract’s estimated total cost exceeds its estimated total revenue, Granite recognizes the full estimated loss on the uncompleted contract. Consider these factors when interpreting a contractor’s margin trend rather than treating the percentage alone as a stable measure of earning power. Granite’s 2025 Form 10-K
Assess debt in context of liquidity and business structure
A consolidated debt total can combine obligations tied to different activities. Caterpillar reports machinery operations separately from Financial Products, which includes financing and insurance services for equipment purchases and leases. Its filing also discusses credit facilities, covenants, liquidity and leverage measures. For equipment makers with finance arms, distinguish the financing business from machinery operations and use consistent definitions across peers. Consider debt together with cash, available liquidity, maturities, interest burden and the cash flows available to meet obligations. Caterpillar’s 2025 Form 10-K
For contractors, include working capital and the timing of customer payments in the debt analysis. Project progress and contract payment terms can affect operating cash flow, so a large backlog alone does not establish that cash will be available to repay borrowing. Granite’s 2025 Form 10-K
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A useful company-by-company worksheet should keep the measures visible without implying that unlike figures are directly comparable. Use the latest available filings and releases, and enter the reporting period and company definition alongside each number.
| Comparison field | What to record |
|---|---|
| Business model and mix | Equipment maker, contractor, materials producer or combination; identify the relevant segment. |
| Backlog | Reported amount and date; issuer’s definition; contract or award status; disclosed funding, cancellation, concentration and conversion details. |
| Margin | Gross, operating or adjusted measure; company or segment; reporting period; factors affecting execution, pricing, costs and mix. |
| Debt and liquidity | Operating-company and financing-business context; cash, liquidity, maturities, interest burden and cash flow. |
These entries support analysis, but do not produce a standalone investment ranking. The cited disclosures illustrate differences among Caterpillar, Deere and Granite; they are not a census of the construction sector or a current stock recommendation. Stock prices and valuation multiples are also outside this backlog-margin-debt comparison.
Use management’s demand view as context, not proof
In Caterpillar’s 2025 annual-report message, Chairman and CEO Joe Creed wrote: “Urbanization, digitalization, electrification and the evolving global energy landscape are creating sustained, long-duration demand for the physical systems that underpin modern life.” This is Caterpillar’s view of its demand environment, not an independent forecast. Caterpillar 2025 Annual Report
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