Last week, the Senate passed a bipartisan infrastructure bill that was decades in the making. Not since the 1950’s has a package this large been passed, but of course President Biden’s long sought-after bill has a way to go before becoming law.
The haggling and debate over what projects are getting money is just about finished. Many states will benefit from badly needed repairs and new construction. These projects will take years to finish, but our country will be better off for it. Plus, most (if not all) contracts will be filled by American companies.
From a market perspective, plenty of winners will emerge. New jobs will be created, materials and tools will be purchased and delivery systems will be even busier – all positives for the economy. So which companies should we invest in?
Stocks that will benefit from the infrastructure bill
There are some obvious names that make the list. The first ones that come to mind are Caterpillar (NYSE: CAT) and Deere (NYSE: DE), large equipment manufacturers. Infrastructure requires specialized equipment and technology as well, so I expect Carrier (NYSE: CARR) and Otis (NYSE: OTIS) to win some nice contracts.
Next we have materials, and the best names are Marietta Materials (NYSE: MLM), Vulcan Materials (NYSE: VMC), Eagle Materials (NYSE: EXP) and Bluelinx (NYSE: BXC). Cement could be big as well, so consider US Gypsum (NYSE: USG) and Cemex (NYSE: CX).
The multinational conglomerate 3M (NYSE: MMM) should also do well. And don’t forget the railroads, which include Union Pacific (NYSE: UNP), Norfolk Southern (NYSE: NSC), and CSX (NYSE: CSX). Materials have to be carried to their destination, and these companies should reap the rewards for years to come.
As you can see, there are plenty of opportunities to invest in high-quality companies as we embark on some mammoth infrastructure projects. The last big infrastructure plan (some 60+ years ago) served as a catalyst for amazing growth here in the US. Let’s see it happen again.