[ECG] Everus Construction Thesis 2026: Post Spin Electric Transmission Mechanical Construction Growth

Key Takeaways

• ECG FY2025 revenue ~$3.05-3.25B (+8-15% YoY) with adj. EPS ~$2.95-3.45 reflecting continued post-October 2024 MDU Resources spin-off + first full standalone fiscal year as independent $3.05-3.25B aggregate Electric Transmission + Mechanical Construction + Building Products specialty contractor ($1.75-1.95B aggregate Electric Transmission + ~$1.25-1.40B aggregate Mechanical Construction) under continued President + CEO Jeff Thiede since October 2024 (~1-year tenure as Everus standalone CEO; selected post-October 2024 MDU Resources spin-off succession from MDU Resources Construction Services predecessor).
• Electric Transmission Pipeline (~$1.75-1.95B revenue): ~$1.75-1.95B aggregate Electric Transmission revenue (~55-60% revenue mix); selected primary Electric Transmission + Distribution + Substation + selected various aggregate Utility-scale + Solar + Wind + Battery Storage construction services + selected various aggregate ~$5.0-7.5B aggregate Electric Transmission + Distribution backlog + selected various aggregate Utility + IPP (Independent Power Producer) + Hyperscaler Data Center + selected various aggregate Inflation Reduction Act + Infrastructure Investment & Jobs Act demand tailwind + selected various aggregate post-2024 Hyperscaler Data Center electric infrastructure expansion.
• Mechanical Construction Pipeline (~$1.25-1.40B revenue): ~$1.25-1.40B aggregate Mechanical Construction revenue (~40-45% revenue mix); selected primary Mechanical Construction + Electrical Construction + HVAC + Plumbing + Fire Protection + selected various aggregate Industrial + Commercial + Data Center + Hospital + Education end-market exposure + selected various aggregate ~$1.5-2.5B aggregate Mechanical Construction backlog + selected various aggregate post-2024 Hyperscaler Data Center mechanical infrastructure expansion.
• Capital position + balance sheet: post-October 2024 MDU Resources spin-off standalone capital structure; ~$0.40-0.50 aggregate annual dividend (post-spin initiation; ~0.7-1.2% aggregate dividend yield); ~$25-100M aggregate FY2025 buybacks; aggregate capital return ~$40-130M FY2025; net leverage ~0.5-1.0x Net Debt/EBITDA; investment-grade Baa3/BBB- credit rating; ~50-51M diluted shares; weighted average debt maturity ~3-4 years.
• FY2026 thesis catalysts: Electric Transmission pipeline (~$1.75-1.95B + $5.0-7.5B aggregate backlog) + Mechanical Construction pipeline ($1.25-1.40B + ~$1.5-2.5B aggregate backlog) + post-October 2024 MDU Resources spin-off standalone capital structure + Inflation Reduction Act + Infrastructure Investment & Jobs Act demand tailwind + post-2024 Hyperscaler Data Center electric + mechanical infrastructure expansion.

Company Background

Everus Construction Group, Inc. (NYSE: ECG) is the largest specialty Electric Transmission + Mechanical Construction + Building Products contractor in the US, spun off from MDU Resources Group (MDU) on October 31, 2024 as a standalone publicly traded company (~1-year operating history as standalone; selected predecessor MDU Resources Construction Services ~50+ year heritage). Selected post-October 2024 spin-off ~50-51M diluted shares + initial standalone capital structure + selected post-October 2024 Jeff Thiede CEO appointment (succeeded MDU Resources Construction Services predecessor leadership). HQ Bismarck North Dakota; ~7,500-8,500 employees; selected various aggregate ~50+ aggregate operating subsidiaries + selected various aggregate Electric Transmission + Mechanical Construction + Building Products specialty contractor footprint.

ECG operates 2 primary segments: Electric Transmission 55-60% revenue ($1.75-1.95B) + Mechanical Construction 40-45% revenue ($1.25-1.40B). Electric Transmission revenue 55-60% revenue mix ($1.75-1.95B; selected primary Electric Transmission + Distribution + Substation + Utility-scale + Solar + Wind + Battery Storage construction services). Mechanical Construction revenue 40-45% revenue mix ($1.25-1.40B; selected primary Mechanical Construction + Electrical Construction + HVAC + Plumbing + Fire Protection). Aggregate backlog: ~$6.5-10B aggregate (Electric Transmission ~$5.0-7.5B + Mechanical Construction ~$1.5-2.5B).

Capital position: post-October 2024 MDU Resources spin-off standalone capital structure; ~$0.40-0.50 aggregate annual dividend (post-spin initiation; ~0.7-1.2% aggregate dividend yield); ~$25-100M aggregate FY2025 buybacks; aggregate capital return ~$40-130M FY2025; net leverage ~0.5-1.0x Net Debt/EBITDA; investment-grade Baa3/BBB- credit rating; ~50-51M diluted shares; weighted average debt maturity ~3-4 years.

Electric Transmission Pipeline (~$1.75-1.95B Revenue)

The Electric Transmission pipeline is ECG's foundation thesis: ~$1.75-1.95B aggregate Electric Transmission revenue (~55-60% revenue mix) + selected primary Electric Transmission + Distribution + Substation + selected various aggregate Utility-scale + Solar + Wind + Battery Storage construction services + selected various aggregate ~$5.0-7.5B aggregate Electric Transmission + Distribution backlog + selected various aggregate Utility + IPP (Independent Power Producer) + Hyperscaler Data Center + selected various aggregate Inflation Reduction Act + Infrastructure Investment & Jobs Act demand tailwind + selected various aggregate post-2024 Hyperscaler Data Center electric infrastructure expansion. Selected primary ECG platform: ~$1.75-1.95B aggregate Electric Transmission revenue + ~$5.0-7.5B aggregate Electric Transmission backlog (~3-4x book-to-bill).

FY2025 Electric Transmission dynamics ($1.75-1.95B aggregate revenue): selected continued post-October 2024 ~+10-15% aggregate Electric Transmission revenue growth (Inflation Reduction Act + Infrastructure Investment & Jobs Act demand tailwind + post-2024 Hyperscaler Data Center electric infrastructure expansion + Utility + IPP demand) + ~$1.75-1.95B aggregate Electric Transmission revenue + selected various aggregate Utility + IPP + Hyperscaler Data Center end-market exposure. Selected post-October 2024 ~$1.50-1.95 incremental annual EPS contribution as Electric Transmission pipeline drives incremental margin.

FY2026 catalyst: continued Electric Transmission pipeline + ~$1.50-1.95 incremental annual EPS contribution under continued Jeff Thiede leadership (~1-year tenure). Selected aggregate ~$1.90-2.15B aggregate Electric Transmission revenue + selected various ~+8-12% aggregate Electric Transmission growth + selected various aggregate ~$5.5-8.0B aggregate Electric Transmission backlog + selected various aggregate Utility + IPP + Hyperscaler Data Center end-market exposure + selected various aggregate Inflation Reduction Act + Infrastructure Investment & Jobs Act demand tailwind + selected various aggregate post-2024 Hyperscaler Data Center electric infrastructure expansion. Risks: Quanta Services (PWR, ~$30-40B Mcap; Electric Transmission) + MasTec (MTZ, ~$10-13B; Electric Transmission + Communications) + MYR Group (MYRG, ~$3-4B; Electric Transmission) + Primoris Services (PRIM, ~$3-5B; Energy + Utilities) + IES Holdings (IESC, ~$2-3B; Electrical Contractors) + selected various aggregate Electric Transmission + Distribution competitive displacement + Federal Reserve interest rate cycle considerations + Inflation Reduction Act + Infrastructure Investment & Jobs Act policy considerations + selected various aggregate Hyperscaler Data Center capex cycle considerations.

Mechanical Construction Pipeline (~$1.25-1.40B Revenue)

The Mechanical Construction pipeline is ECG's primary growth thesis: ~$1.25-1.40B aggregate Mechanical Construction revenue (~40-45% revenue mix) + selected primary Mechanical Construction + Electrical Construction + HVAC + Plumbing + Fire Protection + selected various aggregate Industrial + Commercial + Data Center + Hospital + Education end-market exposure + selected various aggregate ~$1.5-2.5B aggregate Mechanical Construction backlog + selected various aggregate post-2024 Hyperscaler Data Center mechanical infrastructure expansion.

FY2025 Mechanical Construction dynamics: selected primary ~$1.25-1.40B aggregate Mechanical Construction revenue + selected various aggregate Industrial + Commercial + Data Center + Hospital + Education end-market exposure + selected various aggregate ~$1.5-2.5B aggregate Mechanical Construction backlog + selected various aggregate post-2024 Hyperscaler Data Center mechanical infrastructure expansion. Selected post-October 2024 ~$1.25-1.60 incremental annual EPS contribution as Mechanical Construction pipeline drives incremental margin.

FY2026 catalyst: continued Mechanical Construction pipeline + ~$1.25-1.60 incremental EPS contribution. Selected aggregate ~$1.35-1.50B aggregate Mechanical Construction revenue + selected various aggregate ~$1.7-2.8B aggregate Mechanical Construction backlog + selected various aggregate Industrial + Commercial + Data Center + Hospital + Education end-market exposure + selected various aggregate post-2024 Hyperscaler Data Center mechanical infrastructure expansion + selected various aggregate Mechanical Construction + Electrical Construction + HVAC + Plumbing + Fire Protection cross-sell. Risks: EMCOR Group (EME, ~$25-30B Mcap; Mechanical + Electrical Contractors) + Comfort Systems USA (FIX, ~$15-22B; Mechanical) + API Group (APG, ~$9-12B; Fire Protection) + Limbach Holdings (LMB, ~$1.0-1.5B; Mechanical) + selected various aggregate Mechanical Construction competitive displacement + Hyperscaler Data Center capex cycle considerations + Industrial + Commercial + Data Center + Hospital + Education construction cycle considerations.

Capital Position + Balance Sheet

Capital position + balance sheet: post-October 2024 MDU Resources spin-off standalone capital structure + ~$0.40-0.50 aggregate annual dividend (post-spin initiation; ~0.7-1.2% aggregate dividend yield) + ~$25-100M aggregate FY2025 buybacks + aggregate capital return ~$40-130M FY2025 + net leverage ~0.5-1.0x Net Debt/EBITDA + investment-grade Baa3/BBB- credit rating + ~50-51M diluted shares + weighted average debt maturity ~3-4 years.

FY2026 catalyst: continued ~$45-150M aggregate annual capital return + selected continued ~0.7-1.2% aggregate dividend yield + selected continued ~$0.40-0.55 aggregate annual dividend (post-spin first full year continued dividend track) + selected continued ~0.5-1.0x net leverage + selected various aggregate ~$25-100M aggregate annual buybacks. Selected post-October 2024 MDU Resources spin-off standalone capital structure + selected investment-grade Baa3/BBB- credit rating support continued capital return + Electric Transmission + Mechanical Construction + tuck-in M&A capacity.

Key Core Metrics

• FY2025 revenue ~$3.05-3.25B (+8-15% YoY) vs $2.85B FY2024; adj. EPS ~$2.95-3.45
• 2 segments: Electric Transmission ~55-60% ($1.75-1.95B) + Mechanical Construction ~40-45% ($1.25-1.40B)
• Geographic mix: US ~95%+ (selected primary North America + Hawaii + Puerto Rico)
• Electric Transmission: Electric Transmission + Distribution + Substation + Utility-scale + Solar + Wind + Battery Storage
• Mechanical Construction: Mechanical Construction + Electrical Construction + HVAC + Plumbing + Fire Protection
• Electric Transmission backlog: ~$5.0-7.5B aggregate (~3-4x book-to-bill)
• Mechanical Construction backlog: ~$1.5-2.5B aggregate
• Aggregate backlog: ~$6.5-10B aggregate
• End-markets: Utility + IPP (Independent Power Producer) + Hyperscaler Data Center + Industrial + Commercial + Hospital + Education
• post-October 2024 MDU Resources spin-off (October 31, 2024)
• Predecessor MDU Resources Construction Services ~50+ year heritage
• Net leverage ~0.5-1.0x Net Debt/EBITDA
• ~50-51M diluted shares; ~$40-130M total capital return FY2025
• Dividend ~$0.40-0.50 annual (post-spin initiation; ~0.7-1.2% yield)
• ~$25-100M aggregate FY2025 buybacks
• Investment-grade Baa3/BBB- credit rating
• ~7,500-8,500 employees
• ~50+ aggregate operating subsidiaries

Market Evaluation

ECG FY2026 market evaluation: at ~$55-75 share price + ~50-51M diluted shares = ~$2.8-3.8B market cap; ~$0.40-0.50 aggregate annual dividend + ~0.7-1.2% aggregate dividend yield. Selected primary ECG peers: Quanta Services (PWR, ~$30-40B Mcap; Electric Transmission) + MasTec (MTZ, ~$10-13B; Electric Transmission + Communications) + EMCOR Group (EME, ~$25-30B; Mechanical + Electrical Contractors) + Comfort Systems USA (FIX, ~$15-22B; Mechanical) + MYR Group (MYRG, ~$3-4B; Electric Transmission) + Primoris Services (PRIM, ~$3-5B; Energy + Utilities) + API Group (APG, ~$9-12B; Fire Protection) + IES Holdings (IESC, ~$2-3B; Electrical Contractors) + Limbach Holdings (LMB, ~$1.0-1.5B; Mechanical) + selected various aggregate Electric Transmission + Mechanical Construction specialty contractor companies. Selected ECG ~16-22x P/E (post-spin specialty Electric + Mechanical contractor) + selected ~9-13x EV/EBITDA + selected ~0.7-1.2% dividend yield + selected aggregate ~$3.25-3.55B aggregate FY2026 revenue + selected aggregate ~$3.45-4.00 aggregate FY2026 EPS + selected aggregate ~$45-150M aggregate FY2026 capital return + selected aggregate Electric Transmission + Mechanical Construction pipeline. FY2026 base case: ~$3.25-3.55B aggregate revenue + ~$3.45-4.00 adj. EPS + ~$45-150M aggregate capital return. Bull case: Electric Transmission pipeline acceleration (Inflation Reduction Act + Infrastructure Investment & Jobs Act demand + post-2024 Hyperscaler Data Center electric infrastructure expansion drives ~$5.5-8.0B aggregate Electric Transmission backlog) + Mechanical Construction pipeline acceleration (post-2024 Hyperscaler Data Center mechanical infrastructure expansion drives ~$1.7-2.8B aggregate Mechanical Construction backlog) + post-October 2024 MDU Resources spin-off cost synergies realization drives ~$3.40-3.70B aggregate revenue + ~$3.85-4.40 EPS. Bear case: Quanta Services + MasTec + EMCOR + Comfort Systems + MYR Group + Primoris + API + IES + Limbach competitive intensification + Hyperscaler Data Center capex cycle weakness + Federal Reserve interest rate cycle considerations + Inflation Reduction Act + Infrastructure Investment & Jobs Act policy considerations + Industrial + Commercial + Data Center + Hospital + Education construction cycle considerations + post-October 2024 MDU Resources spin-off standalone operating considerations + post-October 2024 Jeff Thiede CEO succession planning considerations drives ~$2.85-3.05B revenue + ~$2.55-2.95 EPS. The thesis depends on Electric Transmission + Mechanical Construction + Hyperscaler Data Center + IRA/IIJA + post-October 2024 MDU Resources spin-off standalone capital structure.