If you are surprised about the gains seen in the infrastructure stocks since the election, you haven’t been reading 24/7 Wall St. or many other financial trends sites. While President Trump’s infrastructure plan is now being touted as $1 trillion, the legislation for a path to that plan might make the number lower, or even higher. Just don’t bog trend investors with too much detail — the key infrastructure stocks have screamed higher yet again on the back of Trump’s speech to the joint session of Congress.
Investors and the people who use infrastructure are all looking forward to the great infrastructure rebuild. Our grade has been touted as a “D” for years now, and there could be multiple trillions of dollars that need to be spent before it is all said and done. Thousands of bridges need to be replaced or massively bolstered. Water infrastructure is ancient. Ask California how it feels about dams. Refineries are ancient, more pipeline projects are coming, and try comparing the city roads and many parts of the national highway system to other countries. We won’t even bother pointing out the ancient ports and airports.
What is up for grabs is the potential for new billions and billions of dollars for each of the major infrastructure companies. The goal is to “Buy American, and Hire American!” Just do not be so naïve as to think that some foreign outfits won’t be involved. In some cases there may be little choice, and in other cases some of the foreign companies may employee more Americans than actual American companies do.
Again, it just doesn’t matter if the infrastructure spending tallies up to $750 billion, $900 billion, $1 trillion or even more. What matters is “More, Much More! and Coming Soon!” What investors need to consider now is how much some of these companies have run since November 8, 2016. Some are up over 50%, but some of the stocks have taken a breather in 2017 over worries that they either rose too far too fast or that too much future business was being priced in. It is also important to consider that the Dow just hit 21,000 and that the bull market is now about eight years old.
Here are 11 stocks loving the infrastructure ride after the first post-inauguration speech.
AECOM (NYSE: ACM) provides architecture and engineering design services through three services segments: Design and Consulting, Construction, and Management. The company has had many domestic and international operations. It services the transportation, environmental and energy sectors, and it also serves key infrastructure projects such as highways, airports, bridges, wastewater facilities and power transmission and distribution. This puts AECOM right in the major infrastructure investing cross-hairs for what you can expect ahead.
AECOM shares were last seen trading up 4% at $37.82, in a 52-week trading range of $26.46 to $40.72. It has a consensus analyst price target of $43.50 and a market cap of $5.9 billion. So far, the stock was flat year to date.
Caterpillar Inc. (NYSE: CAT) needs no introduction, but it should easily benefit from all the heavy machinery that will be needed for mining, construction and other infrastructure projects. The Dow Jones Industrial Average component pays a hefty dividend, and its stock has continued to defy those who have tracked its monthly global and North American sales trends as the sole basis to invest.
Caterpillar was last seen up 2.2% at $98.77, in a 52-week range of $68.21 to $99.46. It has a consensus price target of $93.73 and a market cap of $57.9 billion. So far in 2017 the stock was up 5.1%.
Chicago Bridge & Iron Co. N.V. (NYSE: CBI) went through a transformation. While technically a Dutch company, it has many Americans in the top ranks and throughout. CB&I spent about $3 billion to acquire the Shaw Group and its former 18,000 employees, and it is now over 40,000 as a result. It also has more than 80 U.S. offices. Its prior core areas included oil and gas infrastructure, steel plate structures and plant manufacturing. Shaw is a vertically integrated player in energy, chemicals, environmental, infrastructure and emergency response industries. For a heavy infrastructure land grab, CB&I should take a share of it.
Chicago Bridge & Iron was down 3.4% at $32.42. The 52-week range is $26.12 to $41.33. The consensus price target is $37.00, and the market cap is $3.2 billion. So far in 2017 the stock was up 5.7%.
Fluor Corp. (NYSE: FLR) is based in Irving, Texas, and provides engineering, procurement, construction, maintenance and project management services to government and private industry. Its five groups are Oil & Gas, Industrial & Infrastructure, Government, Global Services and Power. It had about 43,000 employees in 2013, but that was down to almost 39,000 on last look.
Fluor was last seen up 2.2% at $56.59, in a 52-week range of $44.05 to $58.37. It has a consensus analyst target of $57.88 and a market cap of $7.9 billion. The stock was up 5.9% year to date.