The 10 Best Infrastructure Stocks Now | 2021 List Of All 172

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The 10 Best Infrastructure Stocks Now | 2021 List Of All 172


Spreadsheet data updated daily

Updated on November 12th, 2021 by Bob Ciura

Upgrading the nation’s infrastructure is a pressing need in the United States. U.S. infrastructure—which includes things like highways, bridges, railroads, and more—is in dire need of investment.

Late last week, Congress passed a $1.2 trillion spending package that included $550 billion of new investment in the nation’s infrastructure.

The package will provide funding for improvement in airports, ports, roads, bridges, tunnels and public transit. In addition, investment will be made to improve transportation safety and water and energy systems as well as upgrade the nation’s broadband access.

Naturally, investors might want to know which companies would benefit from a massive investment in U.S. infrastructure.

With this in mind, we created a list of over 170 infrastructure stocks. These are companies from a variety of industries, that would benefit from infrastructure spending in some way.

You can download a spreadsheet with all our infrastructure stocks (including important financial metrics such as dividend yields and price-to-earnings ratios) by clicking on the link below:

 

The stocks in the table were derived from four infrastructure ETFs: the iShares U.S. Infrastructure ETF (IFRA); the iShares Global Infrastructure ETF (IGF); the SPDR S&P Global Infrastructure ETF (GII); and the ProShares DJ Brookfield Global Infrastructure ETF (TOLZ).

These ETFs include stocks from a variety of industries that support the building and maintenance of infrastructure assets. Industry groups include energy infrastructure such as oil and gas pipelines, steel producers, manufacturers of construction machinery, and more.

Related: The 10 Best Construction Stocks analyzed on Sure Dividend.

In addition to the Excel spreadsheet above, this article covers our top 10 best infrastructure stocks today.

The following 10 stocks all have strong business models and global competitive advantages. They all pay dividends to shareholders, and will be among the biggest beneficiaries of rising infrastructure spending in the United States.

The table of contents below allows for easy navigation.

Table of Contents

Our top 10 infrastructure stocks are listed below, in no particular order.

The list was compiled based on a combination of quantitative and qualitative factors, including business model strength, competitive advantages, and dividend attractiveness.

Additionally, you can see this analysis as a YouTube video from Rick Orford below.

Keep reading to see our top 10 infrastructure stocks analyzed in detail.

Infrastructure Stock #1: Landmark Infrastructure Partners LP (LMRK)

Landmark Infrastructure Partners provides real estate on a lease basis to wireless carriers for their cell towers, to advertising operators for their outdoor displays, to power companies for their renewable energy units and to data storage companies for their data centers.

Source: Investor Presentation

The MLP uses triple net leases with contractual rent escalation. It thus achieves organic growth without incurring any capital expenses.

It owns properties in difficult-to-replicate locations in major population centers and leases them to Tier 1 tenants, such as AT&T (T) and Verizon Communications (VZ), which easily meet their rent obligations even under the most severe economic conditions.

Landmark Infrastructure Partners has positive growth prospects ahead, primarily thanks to the nationwide rollout of 5G, which will require densification of the existing cell tower networks.

Landmark Infrastructure Partners is a high dividend stock with a 5% distribution yield.

Click here to download our most recent Sure Analysis report on LMRK (preview of page 1 of 3 shown below):

Infrastructure Stock #2: Enterprise Products Partners LP (EPD)

Enterprise Products Partners is a Master Limited Partnership that operates as an oil and gas storage and transportation company. Enterprise Products has a tremendous asset base which consists of nearly 50,000 miles of natural gas, natural gas liquids, crude oil, and refined products pipelines.

It also has storage capacity of more than 250 million barrels. These assets collect fees based on materials transported and stored.

Continued growth is likely over the next several years. The company has nearly $3 billion in capital projects under construction:

Source: Investor Presentation

Enterprise Products is a blue-chip stock due to its impressive history of distribution payout growth.

Click here to download our most recent Sure Analysis report on Enterprise Products Partners (preview of page 1 of 3 shown below):

Infrastructure Stock #3: Vulcan Materials Company (VMC)

Vulcan Materials Company is another clear winner among the nation’s infrastructure stocks, as it is the largest producer of construction aggregates. This includes crushed stone, sand and gravel. Vulcan is also a large producer of aggregates-based construction materials, including asphalt and ready-mixed concrete.

Maintaining a strong balance sheet is important for the company’s ability to invest in growth, which it does organically and through acquisitions. For example, on June 7th Vulcan Materials announced it will acquire U.S. Concrete Inc. (USCR) for a total equity value of $1.294 billion.

USCR is a major supplier of aggregates and ready-mixed concrete, and will complement Vulcan Material’s existing operations. USCR operates in large metropolitan areas with 27 aggregates operations serving California, Texas and the Northeast.

Vulcan Materials is a dividend stock with a fairly low yield of 0.7%. This is below the average S&P 500 Index yield, which currently stands around 1.3%. However, the company routinely increases its dividend at a high rate, including a 9% raise in February 2021.

Click here to download our most recent Sure Analysis report on Vulcan Materials (preview of page 1 of 3 shown below):

Infrastructure Stock #4: Caterpillar Inc. (CAT)

Caterpillar is an obvious choice for this list, as it is the largest heavy machinery company in the United States. Caterpillar manufactures heavy machinery used in the construction and mining industries. The company also manufactures ancillary industrial products such as diesel engines and gas turbines.

Therefore, Caterpillar is one of the top infrastructure stocks.

Caterpillar’s most important future growth catalyst is the continued growth of the global economy. Steady GDP growth in the U.S. and around the world will naturally result in higher demand for heavy machinery. An infrastructure spending plan would provide a significant boost to Caterpillar’s core construction business.

Caterpillar’s strong growth has allowed the company to raise its dividend at a high rate over the past several years. Caterpillar has increased its dividend for over 25 consecutive years, qualifying the stock as a Dividend Aristocrat.

You can see all 65 Dividend Aristocrats here.

Click here to download our most recent Sure Analysis report on Caterpillar (preview of page 1 of 3 shown below):

Infrastructure Stock #5: Martin Marietta Materials (MLM)

Martin Marietta Materials is a leading supplier of various construction materials, including aggregates, cement, ready-mixed concrete and asphalt.

As a result, MLM would be a big winner from a nationwide effort to improve and expand infrastructure. MLM operates a network spanning 26 states, along with Canada and the Bahamas.

Source: Investor Presentation

Organic growth through an expanding economy will provide future growth for MLM, as will acquisitions. For example, the company recently announced the acquisition of Tiller Corporation.

The Tiller business will complement MLM’s product offerings, while also broadening its geographic reach.

MLM pays a dividend to shareholders, but the yield is fairly low at 0.6%, although the company does increase its dividend on occasion, such as a 4% increase in 2020.

Still, the stock is not likely to generate meaningful returns from dividends; instead, capital gains through high earnings growth will provide the bulk of shareholder returns moving forward.

Infrastructure Stock #6: Nucor Corporation (NUE)

Nucor Corporation is the largest steel producer in North America, which would make it a clear winner from a major new round of infrastructure spending.

Nucor manufactures a wide variety of material types, including sheet steel, steel bars, structural formations, steel plates, downstream products, and raw materials.

The majority of the company’s production comes from a combination of sheet and bar steel, as has been the case for many years.

Despite operating in the notoriously volatile raw materials sector, Nucor is also a remarkably consistent dividend growth stock. The company has increased its annual dividend for 48 consecutive years, which qualifies it to be a member of the Dividend Aristocrats list.

Nucor has the longest streak of annual dividend increases among our top infrastructure stocks.

Click here to download our most recent Sure Analysis report on NUE (preview of page 1 of 3 shown below):

Infrastructure Stock #7: Kinder Morgan Inc. (KMI)

Kinder Morgan is among the largest energy stocks in North America.

It is engaged in storage and transportation of oil and gas, and other products. It owns an interest in or operates approximately 83,000 miles of pipelines and 144 terminals.

Its pipelines transport natural gas, refined petroleum products, crude oil, carbon dioxide (CO2) and more. Kinder Morgan’s transportation assets operate like a toll road, whereby the company receives a fee for its services, which generally avoids commodity price risk.

Approximately 90% of Kinder Morgan’s cash flow is fee-based.

Source: Investor Presentation

Kinder Morgan is a major energy infrastructure stock, as it is the largest natural gas transporter, moving approximately 40% of the natural gas used in the U.S.

It is also the largest independent transporter of petroleum products and carbon dioxide, and the largest independent terminals operator.

Click here to download our most recent Sure Analysis report on KMI (preview of page 1 of 3 shown below):

Infrastructure Stock #8: MPLX LP (MPLX)

MPLX, LP is a Master Limited Partnership that was formed by the Marathon Petroleum Corporation (MPC) in 2012.

The business operates in two segments: Logistics and Storage – which relates to crude oil and refined petroleum products – and Gathering and Processing – which relates to natural gas and natural gas liquids (NGLs).

The company’s Logistics and Storage segment has pipeline capacity of 4.7 million barrels per day.

You can see highlights from the company’s third-quarter performance in the image below:

Source: Investor Presentation

Click here to download our most recent Sure Analysis report on MPLX (preview of page 1 of 3 shown below):

Infrastructure Stock #9: Brookfield Infrastructure Partners (BIP)

Brookfield Infrastructure Partners is one of the largest global owners and operators of infrastructure networks, which includes operations in sectors such as energy, water, freight, passengers, and data.

Brookfield Infrastructure Partners is one of four publicly-traded listed partnerships that is operated by Brookfield Asset Management (BAM).

Source: Investor Presentation

Going forward, BIP will likely continue to deliver attractive FFO per share growth.

We expect 7.0% annual FFO-per-unit growth, while the MLP also offers a 3.4% yield.

Click here to download our most recent Sure Analysis report on BIP (preview of page 1 of 3 shown below):

Infrastructure Stock #10: Union Pacific (UNP)

Union Pacific is the largest railroad company in the country and operates more than 32,000 miles of rail throughout the western twothirds of the country. Union Pacific transports industrial and agricultural products, as well as coal and chemicals. The company generates $21 billion in annual revenues.

We expect 7% annual EPS growth over the next five years. Railroads are natural beneficiaries of infrastructure spending, and Union Pacific is optimally positioned as the largest railroad.

Union Pacific has increased its dividend for 13 consecutive years, making it a blue chip stock.

Click here to download our most recent Sure Analysis report on Union Pacific (preview of page 1 of 3 shown below):

Final Thoughts

The 10 infrastructure stocks on this list are derived from a variety of industries, such as oil and gas, steel, energy infrastructure, investment in infrastructure assets, and more. But what they all have in common is that they stand to benefit from a massive infrastructure spending plan.

U.S. infrastructure is about to get a major face-lift due to the recent passage of the infrastructure bill. These 10 infrastructure stocks could benefit from higher demand for oil, gas, steel, and related services.

The 10 infrastructure stocks on this list all pay dividends, and should capitalize on infrastructure spending.

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