24/7 Wall St.

America’s core infrastructure is falling apart.  Roads are sinking, bridges have collapsed, dams are old, power plants and the power grid are substandard, rail systems are ancient, the levees are ancient as are sewerage systems.  The ‘Rebuild America’ bond program has so far done nothing more than contribute a down payment on a decade-long process that could reach well above the “billions” in total funding.

24/7 Wall Street has decided to take a look at the biggest companies which will lead in the rebuilding of America’s ailing infrastructure.  A recent report from Infrastructurereportcard.org gave the United States a grade of a “D” and said that the 5-year investment need was $2.2 trillion. What the real tally is may not matter, but America has to rebuild.

In October, Amtrak rolled out a $100+ billion plan to rebuild its network.  President Obama is expected to call for a transportation infrastructure plan in the coming weeks. Finding all of the nation’s infrastructure winners is too long and too daunting of a task. General Electric and many of the nation’s largest diversified companies are all beneficiaries, and some of the key winners are likely to be foreign entities which employ thousands of workers in America.

The companies featured are the ones behind the design, testing, manufacturing, consulting, engineering, and construction of major projects.  We wanted players that will rebuild the water systems, roads, highways, bridges, airports, rail, levees, waterways, utilities, and buildings around the major infrastructure projects ahead.

These are the companies that 24/7 all Street is most focused on for the American infrastructure revival.

1. AECOM Technology Corporation (NYSE: ACM) offers architecture and engineering design services.   Target markets are transportation, environmental, energy, and it serves projects in key infrastructure areas like highways, airports, bridges, wastewater facilities and power transmission and distribution.  AECOM has a market value of about $3.5 billion and it is expected to have 2011 revenues of close to $8.4 billion. It as 50,000 employees.

2. Chicago Bridge & Iron (NYSE: CBI) is technically Dutch now but is a key infrastructure player with 16,000 employees worldwide that executes more than 600 projects a year with a focus in oil & gas infrastructure, steel plate structures in storage and containment and plant manufacturing.  The company has a market value of more than $3.3 billion and it recently forecast that 2011 revenues are expected to reach $4.3 billion to $4.7 billion.  If America is going to get serious on its energy infrastructure ahead, CB&I stands to greatly win.

3. Emerson Electric Co. (NYSE: EMR) might sound like an electric utility but it is in engineering and project management services for many industries and many government agencies.  It manufactures major equipment for utilities and industry, power and telecom, heating and air-conditioning, network power, climate technologies, and more.  It also has well over 100,000 employees.  The company has a market value of roughly $44 billion and it just recently gave a forecast of 14% to 17% growth to $24 to $24.5 billion in 2011 revenues.

4. Fluor Corporation (NYSE: FLR) is based in Irving, Texas with some 36,000 employees and it provides engineering, procurement, construction, maintenance, and project management services to the oil & gas industries, industrial and infrastructure segments, and the government.  The company has a market value of $12.5 billion and it is expected to have revenues of more than $23.7 billion in 2011.

5. Great Lakes Dredge & Dock Corporation (NASDAQ: GLDD) is based in Oak Brook, Illinois and may be smaller than most infrastructure players, but the company is rather important and has real growth opportunities ahead.  GLD&D is into marine construction with dredging and commercial and industrial demolition operations.  It supports the construction of breakwaters, jetties, canals, and other marine structures and it then gets ongoing maintenance of these projects.  The market value of GLD&D is only $500 million today and revenues are expected to grow to about $725 million in 2011.

6. Jacobs Engineering Group Inc. (NYSE: JEC) is based in Pasadena, California and provides professional, technical, and construction services for government, NASA, oil and gas, building projects, infrastructure and more.  The company has nearly 40,000 workers and much of its effort is international.  The market value of Jacobs is $6.6 billion and it is expected to have revenues of roughly $10.3 billion in 2011.

7. KBR, Inc. (NYSE: KBR) out of Houston is often thought of by the public as a war-support and disaster-support company, but the company’s Government and Infrastructure business provides a variety of services to civilian authorities and private clients outside of the military. The company also has the ability to mobilize workers for disaster assistance perhaps in a faster manner than any other.  The company has over 40,000 employees and has the ability to mobilize far more workers under its network of companies which subcontract and offer support.  A fair value in terms of the stock’s market capitalization today is roughly $5 billion and its expected revenues for 2011 are nearly $10 billion.

8. McDermott and Babcock & Wilcox; a two-in-one…. McDermott International Inc. (NYSE: MDR) has recently gone through a separation of  The Babcock & Wilcox Company (NYSE: BWC).  McDermott is a Houston-based engineering and construction company with operations around the globe.  Its workforce of more than 16,000 mainly serves offshore oil and gas construction, and installs marine pipelines and subsea production systems.  Babcock & Wilcox  is based in Charlotte, North Carolina with some 13,000 employees and it designs, engineers, and offers other services to power generation and environmental control systems for large utility and industrial customers.  It also manufactures and supplies nuclear components and fuels for government and commercial uses, and supplies services for building and maintaining power facilities.

9. The Shaw Group Inc. (NYSE: SHAW) is based in Baton Rouge, Louisiana and is generally thought of in oil & gas and utilities.  The company has roughly 27,000 employees around the world and it also serves the environmental, infrastructure and emergency response industries.  The market value for Shaw is roughly $3.2 billion and its 2011 revenues are expected to be close to $6.6 billion.  One key aspect of Shaw’s business is environmental disasters, so any rebuilding projects in the Gulf Coast from Hurricanes or floods are added wins for the company.  Another aspect is building power plants of any kind, where it is effectively a fully integrated provider of the process from start to finish.

10. Tetra Tech, Inc. (NASDAQ: TTEK) is based in Pasadena, California and is considered one of the greats when it comes to consulting, engineering, construction, technical services, and project management in water infrastructure and resource management.  It has about 12,000 employees and operates in water resources, groundwater services, and watershed management.  It is also into remediation and environmental planning, disaster management, and sustainability projects around climate change and carbon management.  The biggest boost is also the biggest potential snag: it relies heavily upon contracts from federal, state, and local government agencies.  The company has a market value of $1.5 billion and it is expected to have revenues in 2011 of roughly $1.7 billion.

As you can see, the engineering and construction services are many and often overlap.  It is not uncommon for more than one of these to work on a project simultaneously even if these companies do all bid against each other for business.  This is a solid list of companies which will win in the rebuilding of America’s infrastructure.

JON C. OGG