Best Infrastructure Stocks Right Now • Updated Daily • Benzinga

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Who will benefit the most from an announced infrastructure boom? The companies that supply the materials and support the projects.

As the sector remains stalled like the rest of the economy in general, investing in infrastructure stocks now could give you a head start. Here are 5 stocks to watch in 2020.

Overview: Infrastructure Actions

Infrastructure can refer to the buildings that house our industries, the pipes and plumbing that keep fuel and water running, and the electrical lines and panels. Infrastructure is basically everything you don’t see, but our economy and our society cannot function without it.

It is often grouped under the industrial sector because of materials and construction. But infrastructure companies can also be utilities, technology companies, or aerospace and defense contractors.

Infrastructure stocks are currently at a standstill – no one is building anything with the country shut down. If you want to invest in infrastructure stocks, you probably won’t see outsized returns until the pandemic passes.

Investing in infrastructure companies is a long-term investment, and companies that stand to benefit from increased infrastructure spending reside in the following sectors:

  • Materials: Infrastructure projects need steel, wood, plastic, and many other materials to complete. The companies that produce these goods will do well when it comes time to renovate roads, bridges and railways.
  • Energy: Power grids and power plants are on the shortlist of infrastructure in need of a facelift, but energy companies also provide the power needed to run high-profile projects.
  • Transport: Companies that transport raw materials and machinery needed to complete infrastructure projects such as trucking, shipping, railroads, airlines and pipelines.
  • Construction and engineering. Designers, developers and builders. These are the companies that bring new infrastructure projects to fruition.

The projects are divided into 2 categories: hardware infrastructure and software infrastructure.

Physical infrastructure refers to the networks and channels that make economic activity possible. Roads, communication networks, airports, power distribution channels, and water and sewage systems all fall under the category of hard infrastructure.

Soft infrastructure refers to the facilities and networks that maintain the health of society, such as schools, hospitals, police and firefighting forces, and public parks. Most actions here focus on building and maintaining physical infrastructure.

Best Online Brokers for Infrastructure Stocks

Investing in infrastructure stocks can strengthen your portfolio, but you’ll need a suitable broker to execute the best trades possible. Most infrastructure stocks have significant volume and there is no shortage of stocks among major brokers.

Choosing a broker depends on your trading style. If you want to day trade, be sure to use a broker with sophisticated charting tools to maximize your entry and exit points.

Features To Look For In Infrastructure Stocks

  1. Increase dividends: Infrastructure stocks often come from older, established companies that don’t spend money on research and development. Dividend payouts can be an attractive feature, and the crème de la crème have a habit of increasing them frequently. Look for companies that have been increasing their dividends for a number of years.
  2. Stable cash flow and low debt: Much like the oil and gas industry, infrastructure companies buy or lease expensive equipment that depreciates quickly. But the best infrastructure companies maintain manageable debt and stable cash flow.
  3. Strong margins: The margin is the difference between the cost of producing a good or service and what the company earns by selling it. Infrastructure projects can have tight budgets that often exceed. Companies that maximize every dollar have the best performing stocks.

Strengthen your portfolio with infrastructure stocks

Infrastructure stocks may not seem like smart investments right now. But there will certainly be an increase in support for new projects, as the government may look to infrastructure spending as a way to revive the economy.

Investing in infrastructure will not provide superior returns in early 2020, so you will have to stay the course and wait for the right moment to enter. Be prepared for infrastructure spending to be a big talking point once the 2020 presidential campaign season approaches.


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