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Compare heavy construction stocks by first separating equipment makers from project contractors, then assessing backlog, margins, and debt using each company’s definitions and comparable business segments. Backlog is not standardized across issuers, and a manufacturer’s construction-segment margin is not directly comparable with a contractor’s consolidated margin.
Start by separating different kinds of construction businesses
“Construction stocks” can describe companies with very different economics. Caterpillar sells machinery through segments that include Construction Industries and Financial Products; Deere reports Construction & Forestry alongside other businesses; Granite Construction executes infrastructure projects and produces construction materials. A single unadjusted ranking can therefore compare unlike measures and business risks.
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Before collecting figures, identify the business model and the scope of each number:
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1Scan for outdated or missing drivers - takes under a minute2Repair Windows errors before they cause bigger problems3Fix the driver behind crashes, sound loss and screen glitches- Equipment maker: distinguish machinery operations from any financing business and identify the construction-related segment.
- Project contractor: examine contract awards, execution, payment timing, and the projects included in backlog.
- Materials producer or diversified company: identify which activities contribute to the reported revenue and profit, rather than assuming the whole company represents construction.
Use filings to establish segment composition and reported definitions: Caterpillar’s 2025 Form 10-K, Deere’s 2025 Form 10-K, and Granite Construction’s 2025 Form 10-K.
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Compare backlog by definition, quality, and conversion
Backlog is not a standardized industry measure. Granite says companies in its industry define and measure it differently. Granite defines its backlog as unearned revenue expected on executed contracts, but the amount can change as work progresses, new contracts are signed, revenue is earned, estimated quantities or conditions change, and change orders, penalties, or incentives affect projects. Granite also cautions that backlog may not be realized or profitable and may not accurately represent future revenue.
For every company, record the reported measure and period alongside its definition. Then check what makes the work likely to become revenue—and at what economics:
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- Is the amount tied to executed contracts, or does it include awards, options, or other work with different levels of certainty?
- Does the company disclose whether work is funded, when it is expected to proceed, or whether it can be cancelled or changed?
- Are a few customers or projects responsible for a large share of the total?
- How quickly has backlog converted into recognized revenue, and how do new awards compare with work completed?
- What do contract terms, project costs, and execution risks imply about potential profitability?
Granite reported $6.969 billion in Construction Activities Program backlog at December 31, 2025. That company-defined figure includes unearned revenue and other awards; it should not be treated as equivalent to another issuer’s backlog. See Granite’s 2025 Form 10-K for the definition and qualifications.
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State whether a margin is gross, operating, or adjusted operating, and whether it is for the consolidated company or a named segment. Compare matching periods and business scopes. Caterpillar’s Construction Industries segment margin, for example, should not be presented as if it were the company’s consolidated annual operating margin—or directly ranked against a contractor’s consolidated margin without explaining the difference.
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Caterpillar reported 2025 sales and revenues of $67.589 billion. Its Construction Industries segment profit margin was 14.9% in the fourth quarter of 2025, compared with 19.6% in the fourth quarter of 2024. The margin figures are quarterly segment measures, not annual consolidated margins. The company’s fourth-quarter 2025 results provide the segment figures; its 2025 Form 10-K reports annual sales and revenues.
For contractors, reported profit can move as project estimates and work progress 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 an uncompleted contract’s estimated total cost exceeds its estimated total revenue, Granite recognizes the full estimated loss. Read margin changes alongside project execution and cash conversion, not as a standalone signal.
Separate operating debt from financing activity
A consolidated debt total may combine borrowing connected to different businesses. Caterpillar reports machinery operations separately from Financial Products, which provides financing and insurance services related to equipment purchases and leases. When comparing equipment makers, identify the financing arm’s role and use consistent debt definitions across peers. Consider debt together with cash, available liquidity, maturities, interest burden, and the cash flows of the relevant business. Caterpillar’s 2025 Form 10-K discusses its credit facilities, covenants, liquidity, and leverage measures.
For contractors, include working capital and payment timing in the analysis. A large backlog does not by itself show that cash is available to repay borrowing: cash flow depends in part on project progress and when customers pay. Granite describes these effects in its 2025 Form 10-K.
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A useful comparison table should make its scope visible rather than imply that every figure is directly interchangeable.
| Measure | What to record | What to check before comparing |
|---|---|---|
| Business model | Equipment, contracting, materials, or a mix; relevant segments | Whether the company-wide figure includes businesses unrelated to construction |
| Backlog | Issuer’s definition, reported amount, and date or period | Executed work versus awards or options; funding, cancellation or scope changes, concentration, timing, and conversion |
| Margin | Gross, operating, or adjusted measure; segment or consolidated scope; period | Whether the business unit and accounting measure match, and whether project estimates or business mix affect the trend |
| Debt and liquidity | Debt definition, cash, available liquidity, maturities, and interest burden | Financing subsidiaries, working-capital needs, payment timing, and cash flow available to service obligations |
These are analytical checks, not a universal scoring formula. The cited filings do not establish one industry-wide benchmark for backlog, margin, or debt. The examples here—Caterpillar, Deere, and Granite—illustrate why definitions and business models matter; they are not a full census of construction companies or a ranked investment recommendation. Company figures are time-sensitive, so consult the latest filings for the reporting period you are comparing.
Caterpillar Chairman and CEO Joe Creed wrote in the company’s 2025 annual-report message: “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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