Top Infrastructure Stocks for the Biden Presidency

Former Vice President Joe Biden became the 46th President of the United States on Wednesday, Jan. 20, 2021, and he’s looking to hit the ground running.

President Biden has pledged to govern as a centrist.  But he also has made it very clear that he wants to “Build Back Better” with an emphasis on renewable energy and modern infrastructure. These priorities likely will be warmly embraced by a Democrat-controlled Congress without provoking a filibuster from Republican senators.

“A Biden administration will mean more regulatory scrutiny and probably higher taxes across the board,” says Rodney Johnson, president of economic research firm HS Dent Publishing.  “But there will be opportunities. Infrastructure spending, green energy and healthcare are all Democratic priorities and should do well under a Biden presidency.”

As mentioned, a key plank of President Biden’s platform is his “Build Back Better” plan, which includes pledges to “mobilize American manufacturing” and “build a modern infrastructure.”

While Biden will certainly benefit from a more accommodative Senate, he was unlikely to get a lot of pushback on these particular issues.  Both parties at least pay lip service to the need for a manufacturing renaissance and for investments in infrastructure.

“Infrastructure improvement and supply-chain reshoring of health care goods and other items deemed critical to national security likely will be pushed either by a split government or one led by the Democrats,” WFII analysts say.

Ahead of these expected changes, many analysts are saying now is the time to establish a position in infrastructure.  Investors will want to look for firms within the space which boast strong fundamentals with plenty of upside potential.  To help with the legwork of selecting which infrastructure investments are right for you, the WSWD research team has put together this list of their top recommendations. 

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Martin Marietta Materials (MLM) is engaged principally in the building materials business, including aggregates, cement, ready mixed concrete and asphalt and paving product lines.  The aggregates product line is sold and shipped from a network of more than 270 quarries and distribution facilities in 26 states, Canada, the Bahamas and the Caribbean Islands.  The cement, ready mixed concrete and asphalt and paving product lines are located in strategic, vertically integrated markets, predominantly Texas and Colorado.

 Building materials are used for construction of highways and other infrastructure projects, and in the non-residential and residential construction industries.  Aggregates and cement products are also used in the railroad, agricultural, utility and environmental industries.  The Company also has a Magnesia Specialties business that manufactures and markets magnesia-based chemical products used in industrial, agricultural, and environmental applications, and dolomitic lime.

Biden’s win should help to speed along a major boost in infrastructure spending, making MLM one of the best stocks to buy for the new administration.

Eaton (ETN) doesn’t generate power, and it’s not a pure play on green energy like some of the other best “Biden stocks.”  But, as a major supplier of electrical components and systems, it is absolutely an indirect play on this fast-growing industry, and one that is likely to thrive irrespective of the inevitable booms and busts we’ll see in the coming years.  The wind and solar farms popping up around the country need to be incorporated into the national grid, and that’s precisely what Eaton does.

Eaton is a power management company with a 109-year history. It has been listed on the NYSE for 97 years and has paid a dividend every year since 1923. That’s remarkable consistency in an industry that has gone through incredible changes over the past century, and that’s a major selling point of this stock.

Many of the high-flying stocks in alternative energy might or might not be around a decade from now.  This is still very much the wild west.  But Eaton almost certainly will be, supplying the survivors with power systems and software and integrating them into the grid.

If a boom in infrastructure spending is on the horizon, then it’s hard to avoid Caterpillar (CAT), the world’s leading maker of construction and mining equipment.  The company also makes diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives.

You probably wouldn’t want Caterpillar‘s equipment in your backyard.  What would the neighbors say, after all?  But if you’re looking to start a major construction project, you’re going to order from Caterpillar.

Caterpillar has traded in a range for the past few years, unable to get much traction.  Weakness in emerging markets really took the wind out of the stock’s sails.

Something interesting happened in 2020, however.  Yes, Caterpillar tanked along with the rest of the market in February and March.  But it not only recouped its losses in the rally that followed, it actually broke out of a three-year trading range.

Caterpillar is not purely a play on American infrastructure, of course.  The company has a global presence and should benefit from a recovery in emerging markets as well.

When discussing infrastructure stocks to buy, the usual suspects take center stage for good reason.  These are the companies that are focused on building something, anything.  But few talk about the importance of dealing with the waste products they invariably produced.  That’s where Waste Management (WM) enters the fray.

True, WM stock isn’t exactly the sexiest infrastructure play.  Nevertheless, if Biden truly “builds back better”, Waste Management and its ilk will have their day in the sun.  True, the push for a greener society should mitigate our waste production.  Plus, exciting technologies can make products longer lasting, helping to ease the pressure on our landfills.  Still, that pressure won’t be eliminated, not by a long shot.

With our sizable population and consumption culture, we depended on other countries to handle our waste products.  But increasingly, those developing countries have rejected our trash — which, you know, good for them.  Of course, that puts us in a bind, which makes a cynical plus for WM stock.

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