2 infrastructure stocks and 1 ETF to buy in July
An infrastructure bill may soon become a reality, given how tireless President Biden works to sign his multibillion-dollar plan, and it’s the only trigger infrastructure actions need now. to reach the next stage of their rally. I have three infrastructure choices on my radar in July: two top stocks that are on the verge of releasing earnings, and an exchange-traded fund (ETF) which is a fantastic way to play up the spending theme. infrastructure thanks to its size and diversity.
Unbeatable blend of income and dividend growth
With Brookfield Infrastructure Partners (NYSE: BIP) (NYSE: BIPC) stocks, you can expose yourself to several important industries in the infrastructure sector, many of which are also on Biden’s spending list. Examples include transport (rail, toll roads), utilities (electricity and gas transport and pipelines), intermediate energy (gas pipelines) and data infrastructure (telecommunications towers, cable networks to optical fibers, data centers).
A common theme throughout its portfolio is that most of its assets are regulated or contracted. This means that all Brookfield Infrastructure does is acquire and operate quality assets and periodically renew its portfolio to replace mature assets. In between, these assets generate stable cash flow for the business to support growth and dividends. In fact, Brookfield Infrastructure has not only paid regular dividends, but has increased them every year so far – between 2009 and 2021, its dividend has grown at a compound annual rate of 10%, driven by a CAGR of 16. % in its operating funds (FFO).
Although it has a large international footprint, North America is its largest market; and Brookfield Infrastructure’s story suggests it would leave no chance of seizing opportunities as infrastructure spending in the United States takes off. His quest continues to acquire the Canadian petroleum infrastructure company, Inter-pipeline (TSX: IPL) Even as oil prices continue to recover, is a prime example of the company’s thirst for growth.
Brookfield Infrastructure generated a record first quarter FFO and is set to release its second quarter results on August 5. With the stock losing ground in recent weeks and generating a solid 3.6%, Brookfield Infrastructure is an underrated infrastructure dividend stock. may want to add to your portfolio.
Record-breaking earnings report is on its way
The main motive of an infrastructure plan is to modernize and rebuild bridges, highways, roads, ports, airports and mass transit systems, and most of this work would not be possible without it. use of steel. This largely explains why steel inventories have exploded this year. The rally still has legs as infrastructure spending has yet to take off. Nucor (NYSE: NUE). Nucor is the largest manufacturer of steel and steel products in the United States.
The price of hot-rolled steel coil – a key commodity used in construction – is reaching record highs as I write these lines, as demand for steel is already on a roll. Rising steel prices propelled Nucor’s first quarter net income to an all-time high with sales growth of 33%.
Nucor is not yet finished: it will release its second quarter results in the coming days and is expected to post another record quarter. With Nucor also enjoying a strong balance sheet and growing dividend each year for the past 48 consecutive years, it is one of the few Dividend Aristocrat stocks ready to directly benefit from increased infrastructure spending.
The only infrastructure ETF you should pay attention to
If you still can’t decide which stock to buy but also don’t want to miss out on a potential infrastructure boom, here’s what you should do: Industry. My first choice is the Global X US Infrastructure Development ETF (NYSEMKT: PAVE) Because it is a pure US infrastructure ETF, it is the largest infrastructure ETF and has a wide variety of stocks that could give you the broadest possible exposure to the sector – it held 99 shares as of July 14.
Whether it’s steel, heavy machinery, building materials, railways, engineering services, energy infrastructure, or even industrial conglomerates that serve infrastructure industries, the Global X US Infrastructure Development ETF has all of this and more. To give you an idea, here are some of the shares held by the ETF as of July 14:
- Deere & Co.
- Pacific Union
- Sempra Energy
- Vulcan materials
- Quanta Services
Given that diversity and a fairly low expense ratio of 0.47%, this ETF looks set to deliver solid returns once Biden’s infrastructure spending program takes off. It’s an unconventional choice and a perfect addition to a portfolio of other traditional infrastructure stocks that could win big under the Biden administration.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.