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One of the biggest priorities facing what is now a very divided Congress is the need to start fixing what is an old and worn out United States infrastructure. This includes many bridges, buildings, roadways, airports and much more. One of the key components for fixing the infrastructure is steel, and with pricing starting to improve, one Wall Street analyst thinks there are some solid stocks to buy now.

In a new Jefferies report, the materials team that covers the steel industry, including mining, notes that it appears that prices are indeed rising.

The report said this:

Channel checks this week indicate US Hot Rolled Coil prices are gradually improving, with spot offers generally >$700/ ton following the recent +$40 per ton price hike. We believe rising March scrap prices will be supportive of price gains near term, aided via some consumer re-engagement.

Jefferies is positive on four companies, which include mills, a service center and a mining play. All are rated Buy at the firm.

Cleveland-Cliffs

Jefferies likes this top mining play. Cleveland-Cliffs Inc. (NYSE: CLF) is a mining and natural resources company. It is a supplier of iron ore pellets to the North American steel industry from its mines and pellet plants located in Michigan and Minnesota. The company’s segments include U.S. Iron Ore and Asia Pacific Iron Ore. Operations of the latter are located in Western Australia and consist of its Koolyanobbing operation.

While the company is a pure play iron ore miner, Cleveland-Cliffs offers high leverage to U.S. steel prices and production as U.S. contracts are linked to a mix of seaborne iron ore and U.S. steel prices.

Investors receive a 1.8% dividend. The Jefferies price target for the shares is $13.75, and the Wall Street consensus target is $12.97. The stock closed below those levels at $11.09 on Thursday.

Nucor

This top steel company should continue to do very well if the economy sees continued strength this year and nonresidential construction grows. Nucor Corp. (NYSE: NUE) is one of North America’s largest steel producers, with almost 27 million tons of finished steel capacity at 23 mini-mills throughout the United States. The company’s downstream steel products business includes rebar fabrication, steel joists/deck, cold finished bars, fasteners, building systems and wire mesh. Nucor also has 5 million tons of scrap processing capacity.

Nucor has always kept a very conservative balance sheet and is poised for slow but steady growth next year and beyond, especially if a huge infrastructure build-out becomes a reality. In addition, global weather catastrophes have also helped continue to drive the need for steel products.

Nucor investors receive a 2.64% dividend. Jefferies has a $70 price target, and the consensus target is $68.42. The stock ended Thursday at $60.57.

Reliance Steel & Aluminum

This is a top Service Center play that the Jefferies team is positive on. Reliance Steel & Aluminum Co. (NYSE: RS) provides metals processing services and distributes a line of approximately 100,000 metal products, including alloy, aluminum, brass, copper, carbon steel, stainless steel, titanium, and specialty steel products. Its primary processing services comprise cutting, leveling, sawing, machining, and electropolishing.

The company also fabricates and distributes structural steel components and parts; provides metal components and inventory management services; distributes alloy, carbon, and stainless steel bar and plate products; and steel and nonferrous and aerospace metals, including aluminum, steel, titanium, nickel alloys, and aluminum bronze, offering full or cut to size materials

Reliance is the largest metals service center company in North America, operating in more than 200 locations. About half of its business is warehousing and the other half involves some sort of value-add processing or fabricating. Non-ferrous volume comprises about 30% of its annual shipments. The company tends to sell small spot priced tons to customers, the majority requiring delivery within 24 hours.

Shareholders receive a 2.46% dividend. The $105 Jefferies price target is higher than the $91.00 consensus estimate. Shares closed most recently at $89.25.

Steel Dynamics

This is another steel company on which Jefferies remains very positive. Steel Dynamics Inc. (NASDAQ: STLD) operates six steel mini-mills in Indiana, Virginia, Mississippi and West Virginia. Production capacity has been nearly 10 million tons, of a total 110 million U.S. capacity.

The company makes flat-rolled products, special/merchant bars and structural steel products. Steel Dynamics can process about 7 million tons of ferrous scrap and has a downstream operation that processes finished steel.

Shareholders receive a 2.57% dividend. The Jefferies price target is $43. The consensus target is $42.65, and shares closed at $37.32.

With steel pricing firming, and export potential and demand at home still strong, all these stocks make sense for growth investors, especially after price pullbacks from last summer’s highs. A big congressional or White House initiative for an infrastructure build-out could significantly move the industry as well.