Best Infrastructure Stocks to Invest In for Ultimate Growth
I know you’re sick of hearing it… but… it’s finally infrastructure week. It’s become quite the joke among investors, but the long-anticipated date is finally here. More importantly, the best infrastructure stocks to invest in are gaining attention as a result.
The infamous $1.2 trillion rebuild plan aims to fix the supply chain issues while addressing America’s failing infrastructure. With this in mind, the plan gives the government the ability to spend funds for bridges, roads, clean water & energy, and public transportation.
Seeing that inflation is running rampant, hitting a 30-year high in some measures, the plan comes at a critical time. Among the key objectives of the bill include:
- $110 billion – Roads & Bridges
- $65 billion – Internet Access
- $39 billion – Public Transit
- $7.5 billion – EV Charging
The new funds will boost several important markets that can help the U.S. get back on track. In that case, let’s look at the best infrastructure stocks looking to benefit from these developments.
Best Infrastructure Stocks to Invest In for…
Dividends: No. 5 Hannon Armstrong Sustainable Infrastructure (NYSE: HASI)
- Market Cap: 5B
- Dividend Yield: 2.24%
- YOY Revenue Growth: .01%
Hannon Armstrong checks all the boxes when it comes to strong infrastructure plays.
- High Dividend Yield
- Renewable Energy Investments
- Sustainable Infrastructure
- Growing portfolio of Assets
- Driven Management
Not only that, but Hannon is also a REIT. Meaning investing in the company gives you access to the projects they are investing in. And with the company’s diverse portfolio of assets, Hannon looks like a strong candidate to benefit from the new deal.
In fact, the firm has over 260 total investments. Even more, 57% are in solar and 25% wind, two of the fastest-growing renewable energy markets.
Steel Exposure: No. 4 Nucor Corp. (NYSE: NUE)
- Market Cap: 31.6B
- Dividend Yield: 1.45%
- YOY Revenue Growth: 109%
As the largest steel company in the U.S, Nucor is one of the best infrastructure stocks with the new bill in place. Additionally, Nucor is North America’s largest recycler of scrap metal. At first, this may not seem like much, but with commodity prices soaring, scrapping is a significant business.
The steelmaker is likely a hidden gem in the stock market right now, with record sales reaching $10.3 billion in Q3. Not only that, but this equals out to a massive $7.28 EPS. As a result of higher demand, Nucor has achieved 100% year-over-year (YOY) sales growth in the past two quarters.
Looking ahead, Nucor is in an excellent position to continue benefitting from the uptick in construction projects. With a primary focus on projects like bridges, internet towers, and public transit, steel will be a hot commodity.
All in all, the company’s growing backlog and upbeat outlook helps it remain one of the best infrastructure stocks to invest in as we advance.
EV’s: No. 3 ChargePoint Holdings (NYSE: CHPT)
- Market Cap: 9.0B
- Dividend Yield: N/A
- YOY Revenue Growth: 61%
A major focus of the infrastructure plan is to promote the adoption of electric vehicles. In particular, the bill dedicates $7.5 billion specifically for building an electric vehicle charging network.
With this in mind, ChargePoint is a leader in this aspect, with over 118,000 charging stations. Furthermore, the EV charge station’s business model is helping further its position. To increase the accessibility of EV charging, the company provides several charging options.
ChargePoint has over 5,000 customers, with 76% being Fortune 50 companies. With an influx of investments in EV charging, look for ChargePoint to maintain its position as a leader.
Best Infrastructure Stocks to Invest In Overall:
No. 2 OshKosh Corp. (NYSE: OSK)
- Market Cap: 7.8B
- Dividend Yield: 1.29%
- YOY Revenue Growth: 16%
OshKosh is a unique infrastructure play. Born in Wisconsin in 1917, the company makes specialty trucks and equipment.
You may be thinking, “What do trucks have to do with infrastructure?” But, these are not your ordinary vehicles. OshKosh makes vehicles like mail carriers, fire trucks, and other specialty machines. Accordingly, part of the rebuilding bill includes electrifying the postal fleet. And OshKosh just announced it will be partnering with USPS.
The multi-billion-dollar contract states that OshKosh will create between 50,000 and 165,000 vehicles for the agency over the next ten years.
On top of this, the company makes specialty machines like concrete mixers and other critical units for the construction industry. Hence, OshKosh is one of the best infrastructure stocks, with the new plan boosting its biggest markets.
No. 1 Vulcan Materials Company (NYSE: VMC)
- Market Cap: 26.9B
- Dividend Yield: 0.73%
- YOY Revenue Growth: 16%
As you can see above, the construction of roads and bridges is drawing significant investments. With this in mind, Vulcan Materials is the largest producer of construction aggregates in the U.S. The company’s products include things like:
- Sand
- Crushed Stone
- And Gravel
Given that these are essential products for construction, Vulcan will be looking to benefit majorly from the new bill. Not only that, but the supplier is executing on a high level. In the third quarter, Vulcan’s revenue grew 16% with higher demand and favorable pricing.
What’s more, the firm’s recent acquisition of U.S. concrete can help the supplier further its market position.
All things considered, Vulcan’s dominant market position, strong balance sheet, and growth outlook lands it number one on the best infrastructure stocks to invest in for next year.
Is Now the Time to Start Investing in the Best Infrastructure Stocks?
With the rebuild deal being passed, we are finally seeing some clarity around the details. That said, the bill will supply funds to much-needed markets.
And as a result of the influx of new money, companies like the ones above will see higher demand. Keep in mind, the Biden administration is strongly emphasizing rebuilding America through infrastructure. This is only one component of the broader agenda.
Not to mention, the higher inflation readings put pressure on officials to act quickly. Since a huge factor in fixing the inflation problem is updating key supply chain pieces, rebuilding infrastructure is the first step.
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Given these points, these are some of the best infrastructure stocks to invest in for your portfolio to capture a piece of the growth.
About Pete Johnson
Pete Johnson is an experienced financial writer and content creator who specializes in equity research and derivatives. He has over ten years of personal investing experience. Digging through 10-K forms and finding hidden gems is his favorite pastime. When Pete isn’t researching stocks or writing, you can find him enjoying the outdoors or working up a sweat exercising.