Road construction workers at work on improving infrastructure.
Source: getty

7 Infrastructure Stocks That May Benefit From President Biden's New Infrastructure Bill

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Mar. 31 2021, Published 2:57 p.m. ET

President Joe Biden is set to unveil a massive $2 trillion infrastructure package on March 31, as the White House looks to solidify the post-pandemic economy.

The plan, which Biden has dubbed the American Jobs Plan, aims at revitalizing the U.S. transportation infrastructure, water systems, broadband, and manufacturing, among other areas. The bill includes roughly $2 trillion in spending that will occur over the next eight years.

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Additionally, to fund the plan over the next 15 years, the bill includes a corporate tax hike to 28 percent and measures to prevent the offshoring of profits.

joe biden infrastructure plan
Source: getty
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Here are the key features laid out in Biden's infrastructure bill:

Significant projects and overhauls are planned in a broad range of industries to create jobs, build and repair outdated systems, and provide access to necessary utilities and care for the countries most at-risk communities.

  • $621 billion will go towards transportation infrastructures such as bridges, roads, public transit, ports, airports, and electric vehicle development and manufacturing.
  • $580 billion invested in U.S. manufacturing, research and development, job training across all sectors.
  • $400 billion directed to care for elderly and disabled Americans.
  • $300 billion for improving drinking-water infrastructure, expand broadband access, and upgrading electricity grids.
  • $300 billion will help to build and upgrade schools, along with constructing and retrofitting affordable housing.
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Infrastructure stocks like these are poised to benefit from the new plan.

With such an influx of funding going into infrastructure, many companies stand to benefit from the added investment. Some stocks have already begun seeing steady inclines as the news has gained steam over recent weeks.

Caterpillar (CAT)

The leading heavy equipment manufacturer will undoubtedly see success as a result of any infrastructure plan that comes out of Washington.

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caterpillar equipment
Source: caterpillar

Caterpillar’s stock was down this time last year, relying heavily on emerging markets that saw devastating effects of the COVID-19 pandemic, although shares have steadily increased since.

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Although shares are near highs for Caterpillar, futures look positive as more EMs get back online. With the addition of a massive U.S. infrastructure bill, projects will be looking towards Caterpillar to source their equipment.

Vulcan Materials (VMC)

The largest aggregate producer in the U.S., Vulcan Materials specializes in providing crushed stone, sand, and gravel to produce asphalt and concrete.

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vulcan materials
Source: getty

With a looming infrastructure bill aimed at repairing roads and bridges, investors can bet Vulcan is primed to score significant gains throughout the eight years of Biden’s plan.

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United Rentals (URI)

United Rentals is one of the largest construction equipment rental companies in the country. URI seems like a good bet when anticipating an influx of infrastructure projects over the next several years.

united rentals
Source: united rentals
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Split into two sectors—general rentals and trench, power and fluid solutions—United Rentals covers a wide swath of plans in the package. General rentals are what one would expect, backhoes, forklifts, earthmoving equipment, boom lifts, etc. Trench, power, and fluid solutions specialize in equipment designed for underground work and fluid treatment, the kind needed for water and underground broadband projects.

Nucor (NUE)

Steel looks to be an in-demand commodity throughout the infrastructure package’s span. That being said, Nucor, the largest domestic steelmaker, is poised to be busy.

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nucor steel
Source: getty

With an emphasis on sourcing U.S. products, Nucor has an advantage over larger, global steel companies. Vital to infrastructure, Nucor’s steel will prove to be a lasting force.

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Crowne Castle International (CCI)

With millions of Americans working from home the past year, the need for fast and reliable internet has never been higher. That and the emergence of 5G technology has put building a modern communications infrastructure a major focus of the Biden Administration.

crowne castle
Source: getty
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Crowne Castle International is one of the largest wireless tower real estate investment trusts (REITs). Even without the government spending bill, CCI looks bullish as wireless providers are racing to establish dominance over the 5G landscape.

Brookfield Infrastructure Corporation (BIPC)

One of the most diversified infrastructure stocks globally, Brookfield Infrastructure Corp., spans many sectors, including transportation, utilities, transportation, and data infrastructure.

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brookfield infrastructure corp
Source: brookfield infrastructure corp.

Being a global company, it may not see as much growth without major infrastructure plans elsewhere. However, with a vast utility network in the U.S., it may be enough to lift its stocks.

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Global X U.S. Infrastructure Development ETF (PAVE)

If investing in individual companies doesn’t fit your strategy, perhaps a more diversified approach will do the trick.

global infrastructure
Source: getty
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Global X U.S. Infrastructure Development ETF holds about 100 infrastructure stocks. With a roughly $2 billion market cap, it has a better-than-most expanse ratio of 0.47 percent.

With about 65 percent of PAVE invested in industrial companies, 21 percent in materials, and a sizable amount in technology and utilities, PAVE may be a solid choice throughout the eight-year plan.

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