Dycom vs. AECOM: Which Infrastructure Growth Stock Should You Buy?

2026.07.16 15:25 (GMT+0)

Dycom vs. AECOM: Which Infrastructure Growth Stock Should You Buy?

The growing long-term public and private capital investment trends have been lucrative for infrastructure companies like Dycom Industries, Inc. DY and AECOM ACM. This favorable scenario is resulting in increased projects for telecommunications, transportation, environmental, energy and water businesses.

Dycom is a specialty contracting firm offering diverse services such as engineering, construction, maintenance and installation for the cable and telephone companies. Conversely, AECOM is a solutions provider offering professional, technical and management services across diverse industries and end markets.

Let’s closely compare the fundamentals of the two infrastructure stocks to determine which one is a better investment now.

The Case for Dycom Stock

Dycom is benefiting from unprecedented investment in AI-driven digital infrastructure, creating a favorable long-term demand environment. Explosive growth in cloud computing, Artificial Intelligence workloads and hyperscale data centers is driving the need for fiber infrastructure, inside-the-fence connectivity, electrical systems and long-haul network deployments. These favorable trends translated into a record first-quarter fiscal 2027 backlog of $11.9 billion, up 46.5% year over year, with a robust 2.2x book-to-bill ratio, providing strong revenue visibility. Customers are also extending contract durations to secure DY’s skilled workforce for multi-year projects, strengthening backlog quality.

Following a record first quarter of fiscal 2027 that exceeded expectations, Dycom raised its fiscal 2027 outlook, now expecting total contract revenues between $7.38 billion and $7.65 billion (from $6.85-$7.15 billion). For the second quarter of fiscal 2027, management forecasts revenues of $1.94-$2.01 billion (up from $1.378 billion reported a year ago), adjusted EBITDA of $284-$303 million (up from $205.5 million reported a year ago) and adjusted EPS of $4.40-$4.82 (up from $3.33 reported a year ago).

Besides focusing on revenue growth, Dycom is also making meaningful profitability improvements through disciplined execution, operating leverage and a favorable project mix. First-quarter fiscal 2027 adjusted EBITDA margin expanded 141 basis points (bps) year over year to 13.4%, while the Communications segment (which contributed 98.3% to fiscal 2026 contract revenues) delivered a 31-bps margin expansion despite continued investments in workforce expansion and geographic growth. Moreover, DY’s balanced capital allocation strategy combines organic investments, strategic acquisitions and shareholder returns to strengthen its competitive position. The successful acquisition of Power Solutions has expanded Dycom's exposure to the rapidly growing data center electrical contracting market, while the pending acquisition of National Technology Integrators further extends its capabilities into structured cabling, security systems and end-to-end digital infrastructure.

Continued scaling of data center projects, productivity improvements, disciplined project selection, successful integration of acquisitions and expanding higher-value digital infrastructure work are expected to support ongoing earnings growth.

The Case for AECOM Stock

AECOM continues to benefit from multi-year public spending programs that support transportation, water, environment and facilities demand in its largest geographies besides the United States, including the United Kingdom, Canada, the UAE and Asia. Besides the funding under IIJA, the company is also leveraging incentives from the "One Big Beautiful Bill" and ongoing "resharing" initiatives, which are creating new opportunities with several years of visibility ahead. In the second quarter of fiscal 2026, total backlog increased 8% year over year to a record $26.2 billion, supported by a 1.2x design book-to-burn ratio and the 22nd consecutive quarter with book-to-burn above 1x.

ACM’s net service revenues (NSR) — defined as revenues excluding subcontractor and other direct costs — are benefiting from strength across core transportation, water, and environment markets. In the second quarter of fiscal 2026, NSR rose to $1.95 billion, with the Americas design business up 8% on a constant-currency basis, which management described as its most profitable area. For the long term, AECOM still aims to achieve 5-8% organic NSR growth annually, projecting a margin run-rate exceeding 20% by fiscal 2028.

Besides market tailwinds, AECOM’s emphasis on investments in proprietary AI and digital delivery capabilities is boding well, mainly for its profit structure. Over time, management expects advisory and program management to represent about half of the business, which supports its longer-term margin targets. Notably, in the second quarter of fiscal 2026, the company’s margin trajectory remained favorable, with segment adjusted operating margin increasing 50 basis points (bps) year over year to 16.5%, supported by operating efficiencies and mix. Management raised fiscal 2026 guidance again to adjusted EPS of $5.90-$6.10 (from $5.85-$6.05) and adjusted EBITDA of $1.275-$1.305 billion (from $1.27-$1.305 billion).

However, risks like tariffs, economic conditions, policy changes and currency movements tend to affect project timing, resulting in delays in awards and a less favorable mix of work. Moreover, AECOM operates with contract structures that require accurate estimating and execution discipline, and outcomes can be affected by claims, change orders or shifting project scopes. In the fiscal 2026 first half, contract assets included approximately $680 million of significant claims, up from about $400 million as of Sept. 30, 2025, which underscores that project-level resolution timing can influence working capital and reported cash flow.

Stock Performance & Valuation

As witnessed from the chart below, in the year-to-date period, Dycom’s share price performance has been above AECOM’s and the broader Construction sector.