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Welcome to Episode #379 of the Value Investor Podcast.
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
The AI revolution might be at the top of everyone’s wish list when buying stocks in 2024, but you don’t have AI without the infrastructure needed to run it. That includes data centers.
Additionally, the Chips Act has pushed $50 billion into the US economy to build chip manufacturing plants.
The $1 trillion infrastructure program is building new bridges, roads, airports, EV infrastructure and broadband networks. Someone has to build all of this out.
How can you invest in the infrastructure companies who are making it all work?
Infrastructure Stocks: How Can You Find Them?
I wish there was just one industry on Zacks.com that was “infrastructure.” But it doesn’t exist. That means you have to dig around in several industries to find those companies that are involved in the build out of the country.
On Zacks Industries, that would mean industries like Building Products – Heavy Construction and Engineering: R&D Services. But you may also find them under Technology Services and other categories that might not look like infrastructure related at first glance.
EMCOR specializes in mechanical and electrical construction, industrial and energy infrastructure and building services. Shares of EMCOR are red hot, gaining 73% year-to-date.
Earnings are expected to rise 35% this year and another 8.8% next year. It trades at 20x forward earnings, which isn’t “cheap” but is in line with the S&P 500. And you are buying the growth anyway. EMCOR is a Zacks Rank #1 (Strong Buy) stock.
Granite Construction is a diversified construction and construction materials company with a market cap of $3 billion. In the second quarter of 2024, it had record revenue up 20% year-over-year.
Shares of Granite Construction are up 38% year-to-date yet it still trades with a P/E of just 13.2. That makes it a value stock. Earnings are expected to jump 67% in 2024 and another 8.2% in 2025.
Should Granite Construction be on your short list?
Sterling Infrastructure operates in three segments: E-infrastructure, which includes data centers, Transportation and Building Solutions. It has a market cap of $3.3 billion.
Shares of Sterling Infrastructure have jumped 30% year-to-date but are still attractive with a forward P/E of just 19.2. Earnings are expected to rise 26.6% in 2024. Sterling Infrastructure is a Zacks Rank #1 (Strong Buy) stock.
Should Sterling Infrastructure be on your short list?
United Rentals is the largest rental equipment company in the world. It has a market cap of $46.5 billion.
Shares of United Rental have popped 26% year-to-date but it has remained attractively priced with a forward P/E of 15.9. A P/E of 15 or under indicates a company is a “value.” Earnings are expected to rise 8.9% this year and another 7% next year. United Rentals pays a dividend, yielding 0.9%.
AECOM is an infrastructure consulting firm which has worked on bridges, water, and new energy projects. AECOM recently reported a record fiscal Q3 2024 performance and raised fiscal full year guidance. AECOM’s backlog is near all-time highs.
Shares of AECOM are up 4.3% year-to-date. It has the highest P/E of the group, however, at 21x. Yet earnings are expected to jump 20.2% this fiscal year and another 10.7% in fiscal 2025.
Should AECOM be on your short list?
What Else Should You Know About Infrastructure Stocks Right Now?
Tune into this week’s podcast to find out.
[In full disclosure, Zacks Value Investor portfolio owns shares of STRL.]
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The Cheapest Infrastructure Stocks to Buy Now
Welcome to Episode #379 of the Value Investor Podcast.
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
The AI revolution might be at the top of everyone’s wish list when buying stocks in 2024, but you don’t have AI without the infrastructure needed to run it. That includes data centers.
Additionally, the Chips Act has pushed $50 billion into the US economy to build chip manufacturing plants.
The $1 trillion infrastructure program is building new bridges, roads, airports, EV infrastructure and broadband networks. Someone has to build all of this out.
How can you invest in the infrastructure companies who are making it all work?
Infrastructure Stocks: How Can You Find Them?
I wish there was just one industry on Zacks.com that was “infrastructure.” But it doesn’t exist. That means you have to dig around in several industries to find those companies that are involved in the build out of the country.
On Zacks Industries, that would mean industries like Building Products – Heavy Construction and Engineering: R&D Services. But you may also find them under Technology Services and other categories that might not look like infrastructure related at first glance.
5 Infrastructure Stocks: Cheap or Not?
1. EMCOR Group, Inc. (EME - Free Report)
EMCOR specializes in mechanical and electrical construction, industrial and energy infrastructure and building services. Shares of EMCOR are red hot, gaining 73% year-to-date.
Earnings are expected to rise 35% this year and another 8.8% next year. It trades at 20x forward earnings, which isn’t “cheap” but is in line with the S&P 500. And you are buying the growth anyway. EMCOR is a Zacks Rank #1 (Strong Buy) stock.
Should EMCOR be on your short list?
2. Granite Construction Inc. (GVA - Free Report)
Granite Construction is a diversified construction and construction materials company with a market cap of $3 billion. In the second quarter of 2024, it had record revenue up 20% year-over-year.
Shares of Granite Construction are up 38% year-to-date yet it still trades with a P/E of just 13.2. That makes it a value stock. Earnings are expected to jump 67% in 2024 and another 8.2% in 2025.
Should Granite Construction be on your short list?
3. Sterling Infrastructure, Inc. (STRL - Free Report)
Sterling Infrastructure operates in three segments: E-infrastructure, which includes data centers, Transportation and Building Solutions. It has a market cap of $3.3 billion.
Shares of Sterling Infrastructure have jumped 30% year-to-date but are still attractive with a forward P/E of just 19.2. Earnings are expected to rise 26.6% in 2024. Sterling Infrastructure is a Zacks Rank #1 (Strong Buy) stock.
Should Sterling Infrastructure be on your short list?
4. United Rentals, Inc. (URI - Free Report)
United Rentals is the largest rental equipment company in the world. It has a market cap of $46.5 billion.
Shares of United Rental have popped 26% year-to-date but it has remained attractively priced with a forward P/E of 15.9. A P/E of 15 or under indicates a company is a “value.” Earnings are expected to rise 8.9% this year and another 7% next year. United Rentals pays a dividend, yielding 0.9%.
Should United Rentals be on your short list?
5. AECOM (ACM - Free Report)
AECOM is an infrastructure consulting firm which has worked on bridges, water, and new energy projects. AECOM recently reported a record fiscal Q3 2024 performance and raised fiscal full year guidance. AECOM’s backlog is near all-time highs.
Shares of AECOM are up 4.3% year-to-date. It has the highest P/E of the group, however, at 21x. Yet earnings are expected to jump 20.2% this fiscal year and another 10.7% in fiscal 2025.
Should AECOM be on your short list?
What Else Should You Know About Infrastructure Stocks Right Now?
Tune into this week’s podcast to find out.
[In full disclosure, Zacks Value Investor portfolio owns shares of STRL.]