Which are 3 popular infrastructure stocks on NZX?

Highlights

• The infrastructure sector helps in boosting jobs and the economy of a country.
• Fletcher Building reported strong performance in FY21.
• Steel & Tube Holdings continued to fare well in revenues as regions lower their COVID-19 alert levels gradually.

New Zealand’s infrastructure sector covers construction projects in various sectors like transport, water, road, building, airport, telecommunications, etc. The COVID-19 pandemic had wide-range effects on the construction and infrastructure sectors. However, the infrastructure sector benefitted from the economic stimulus package released by the government to help COVID-19-affected businesses.

The NZ government plans to spend $57.3 billion on infrastructure from 2021 to 2025 while increasing multi-year capital allowance from $8 billion to $12 billion over the forecast period.

Local Government Minister Nanaia Mahuta also announced on Wednesday that the NZ government would create 4 publicly owned water entities to make sure every Kiwi can have access to inexpensive, long-lasting drinking, waste and storm water infrastructure without inflating costs to households and families.

Let’s have a look at how these 3 infrastructure stocks are performing.

Image source: © 2021 Kalkine Media, Data source- EODHD/Others

Fletcher Building Limited (NZX:FBU; ASX:FBU)

Fletcher Building, a building products manufacturer, conducted its AGM on 19 October. The Group showed a strong performance across all its business areas in FY21.

The Group’s revenue stood at $8.1 billion and EBIT before significant items was $669 million in FY21. Fletcher paid a total dividend of 30cps for the financial year.

RELATED READ: Fletcher Building (NZX:FBU) defies COVID-19 odds to come out with flying colours

FBU plans to focus on cash, a healthy balance sheet, drive operational performance and make value-enhancing growth investments ahead. Fletcher remains on track to get its EBIT margins to around 10% by FY23.

On 28 October, at the time of writing, FBU was trading at $7.03, down 0.85%.

Steel & Tube Holdings Limited (NZX:STU)

Leading providers of steel solutions and distributors, Steel & Tube Holdings, provided a trading update on 26 October. The Group reported that STU continued to enjoy a strong recovery in revenues as Auckland and other regions shifted to COVID-19 Alert Level 3 and below.

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The Group also notified that updated revenue information and trading status in October would be provided on 4 November 2021 at the NZX’s Retail Investor Webinar.

On 28 October, at the time of writing, STU was trading at $1.19, down 0.83%.

Infratil Limited (NZX:IFT; ASX:IFT)

Infratil, NZ’s prominent infrastructure company, announced on 5 October that the Group had pledged 120-130 million pounds of growth capital to Kao Data. IFT will get a 40% stake alongside current owners, Legal & General Group, Goldacre and part of Noe Group, who will each get a 30% stake.

DO READ: Why to consider 4 NZX infrastructure stocks before 2022?

The Group plans to increase its digital infrastructure portfolio and develop successful data centre platform investment in ANZ.

On 28 October, at the time of writing, IFT was trading at $8.27, down 0.6%.

Bottom Line

Increased investment in infrastructure can play a crucial part in the recovery of an economy as it boosts jobs and economic growth both regionally and nationally.

(NOTE: Currency is reported in NZ Dollar unless stated otherwise)