Top infrastructure stocks that could profit from stimulus spending

Summary

• Infrastructure companies include construction, industrial, equipment manufacturer, communication, and construction material provider companies.
• The Biden administration's US$715 billion infrastructure spending plan approved on July 1 to spur growth in the sector.
• Infrastructure investment by the government may create more jobs in the US.

On July 1, the US House approved US$715 billion for infrastructure expenditure. It is part of President Biden's initial US$2.3 trillion infrastructure development proposal. The spending is expected to give a major boost to infrastructure companies engaged in building roads, bridges, highways, rail, and electric vehicle charging stations, drinking and wastewater projects.

Here we discuss eight companies that may benefit from the additional expenditure by the government and the continued strong pace of the economic recovery.

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Deere & Company (NYSE:DE) manufactures agriculture and construction equipment, forestry machines, and provides financial services.

It has a market capitalization of 109.69 billion, and a P/E ratio is 24.23. 

Its net sales and other revenue totaled to be US$ 12.06 billion for the quarter ended May 2, 2021, 30% higher than the same quarter the previous year. For the same quarter, its net income was US$ 1.79 billion higher by 169% compared to the corresponding quarter of the previous year.

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United Rentals, Inc. (NYSE:URI) is engaged in providing equipment on rent. It provides construction, industrial, and safety equipment, and water and fluid solutions tools.

The company has a market capitalization of US$ 23.19 billion and a P/E ratio of 25.26.

For the quarter ended March 31, 2021, revenue and net income was US$ 2.06 billion and US$ 203 million compared to revenue of US$ 2.12 billion and net income of US$ 173 million in the same quarter in 2020. While its revenue decline by 3.2%, net income grew by 17% year over year.

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Source: Pixabay.

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Nucor Corporation (NYSE:NUE) is engaged in manufacturing steel and steel products. It also produces direct reduced iron (DRI) in steel mills. In addition, it is North America's largest steel recycler using scrap steel to produce steel products.

Nucor has a market capitalization of US$ 28.69 billion and a P/E ratio of 17.79. For the three months ended April 3, 2021, its net sale was reported US$ 7.02 billion, compared to US$ 5.62 billion for the same quarter the previous year, reflecting a 25% increase.

The company booked net earnings of US$942.4 million, or $3.10 per diluted share, attributable to shareholders, compared to US$20.3 million or US$0.07 per diluted share for the same quarter in 2020.

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Martin Marietta Materials, Inc. (NYSE:MLM) supplies building materials such as aggregates, cement, asphalt, etc.

Its market capitalization is US$ 21.9 billion, and its P/E ratio is 28.87.

The company's total revenue for the quarter ended March 31, 2021, was reported at US$ 982.4 million compared to 958.2 million in the same quarter in 2020. Its net earnings attributable to the company was US$ 65.3 million compared to US$ 25.9 million in the March quarter, 2020.

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Xylem Inc. Common Stock New (NYSE:XYL) is a global water technology company. It designs, manufactures, and offers highly engineered products and solutions for industrial, commercial, utility, and residential sectors. Xylem water solution includes transport, testing, treatment, and wastewater analysis to the return of water to the environment.

Its market capitalization is US$ 21.79 billion, and its P/E ratio is 72.46.

For March quarter, 2021, its revenue was US$ 1.26 billion compared to US$ 1.12 billion in March quarter, 2020. Its net income was US$ 87,000 for March quarter 2021 against US$ 38,000 in the same quarter the previous year. Its earnings per share diluted was US$ 0.48 in March quarter 2021 compared to US$ 0.21 in the same quarter in 2020.

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Source: Pixabay.

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CSX Corporation (NASDAQ:CSX) provides railroad transport services, including container and trailer services.

Its market capitalization is US$ 74.2 billion, and its P/E ratio is 27.76.

For the March 31 quarter, the company earned revenue of US$ 2.81 billion compared to US$ 2.86 billion in the same quarter the previous year. Its net income for Q1, 2021 was US$ 706 million compared to US$ 770 million for Q1, 2020. Its net earnings per share diluted was US$ 0.93 for Q1, 2021, compared to US$ 1.0 for Q1 the previous year.

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ChargePoint Holdings, Inc. (NYSE:CHPT) is engaged in designing, developing, and providing electric vehicle charging system infrastructure. It also provides various cloud-based services.

Its market cap is US$9.9 billion.

In the March quarter of 2021, its revenue rose from US$32.78 million to US$40.5 million YoY. It booked a net loss of US$187.8 million against US$30.1 million in the same quarter the previous year.

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AZZ Inc. (NYSE:AZZ) was established in 1956. It provides different metal coating solutions, specialty electrical equipment, welding solutions, and highly engineered services. It works in two segments. The first is the metal coatings segment, and the second, being the infrastructure solutions segment.

AZZ has a market capitalization of US$ 1.3 billion and a P/E ratio of 33.75.

Its quarter ended February 28, 2021, is the fourth quarter of FY 2021. Its revenue for FY 2021 was US$ 838.9 million compared to US$ 1.06 billion and US$ 927.1 million in FY 2020 & FY 2019, respectively. Its net income was US$ 39.6 million in FY 2021 compared to US$ 48.2 million and US$ 51.2 million in FY 2020 & FY 2019, respectively.

Please note: The above constitutes a preliminary view, and any interest in stocks/cryptocurrencies should be evaluated further from an investment point of view.