After months of discussions, President Joe Biden’s infrastructure plan was passed into law in November. This new infrastructure package comes with a heavy price tag of $1.2 trillion, with $550 billion in additional government infrastructure spending over the next five years. As a result, the focus is again on which companies are now offering the finest infrastructure stocks.
The infrastructure of the United States receives a C- from the American Society of Civil Engineers (ASCE). In particular, “a water main break occurs every two minutes” in the nation. “Growing wear and tear on our nation’s roads has left 43% of our public highways in poor or mediocre condition,” according to the report. This, however, should not be a deterrent, namely due to the President’s bill.
The trillion-dollar legislation represents some of the most massive government expenditures since World War II ended. Furthermore, the plan’s features suggest that many infrastructure stocks have a lot of upside potential.
Let’s look at just three infrastructure stocks that pay dividends, that are buy-rated by the analysts, and are considered to be overall wise portfolio picks:
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Caterpillar Inc (CAT)
Caterpillar Inc. (CAT) is a Fortune 100 company based in the United States that develops, produces, manufactures, distributes, and sells machinery, engines, financial products, and insurance to clients through a global dealer network. It is the world’s largest construction equipment maker and needs little introduction. What’s important to focus on is CAT’s financials and its stock’s profitability.
CAT revealed its third-quarter earnings in late October. The quarter’s revenue climbed by 25% year over year to $12.4 billion. In addition, the adjusted operating profit was $1.7 billion, or $2.66 per share, up from $1.52 per share in the previous quarter. Cash and equivalents totaled $9.5 billion at the conclusion of the quarter. CAT reports again soon but currently shows us $13.2 billion in sales, at $2.27 per share. CAT currently pays a dividend yield of 2.15%. The consensus price target for CAT is 241.00, according to analysts who provide 12-month price estimates, with a high of 301.00 and a low of 164.00. The forecast reflects an increase of 11.95% from the previous price, and experts tell us to buy stock in CAT.
Brookfield Infrastructure Partners (BIP)
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Brookfield Infrastructure Partners (BIP) is an MLP (master limited partnership) that manages long-term infrastructure assets such as pipelines, utilities, railroads, ports, and data centers. BIP’s infrastructure assets, according to analysts, provide consistent cash flows, strong margins, and growth opportunities. In reality, regulatory organizations account for nearly all of the financial flow. BIP stock is also a means for income investors to get into the infrastructure sector in general.
BIP has raised its yearly payout for the previous 14 years in a row. It now pays a dividend yield of 3.35%. Early in November, BIP released its third-quarter results. Revenue climbed by 33% year-over-year to $2.94 billion over the period. In addition, net income was $413 million, or 72 cents per diluted share, compared to $5 million the year before. Finally, cash and equivalents were $1.84 billion at the end of the quarter. BIP’s current quarter shows us $1.2 billion in sales, at 22 cents per share. The consensus price target for BIP from analysts that provide 12-month predictions is 65.00, with a high of 71.00 and a low of 57.00. The estimate implies an increase of 7.79% over current pricing, and BIP’s buy rating is strong.
Enterprise Product Partners (EPD)
Enterprise Product Partners (EPD) is a midstream energy company based in Houston, Texas. It runs a diverse portfolio of pipelines, storage, and transportation assets as one of North America’s leading energy infrastructure companies. It has built quite a reputation over time. Let’s focus more on the financials, as that’s what’s currently most impressive about EPD.
In early November, EPD revealed its third-quarter results. Total sales increased by nearly 56% year-over-year to $10.8 billion. Net income was $1.2 billion, or 52 cents per diluted share, up from $1.1 billion, or 48 cents per diluted share, the previous year. Operations also generated a record $2.4 billion in net cash flow. EPD has a strong balance sheet and is on course to become a Dividend Aristocrat, with a high dividend yield right now. EPD’s current dividend yield is 8.20%. EPD displays $10.1 billion in sales at 54 cents per share for the current quarter. EPD has a median price target of 29.00, with a high of 32.00 and a low of 24.00 among analysts who have provided 12-month price estimates. The estimate indicates a 20.63% increase from the previous price, and analysts give EPD a robust buy rating that we can’t ignore.
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