Surprise! 3 Infrastructure Stocks That Both Sides of the Aisle Agree Upon.
In perhaps the most vitriolic political cycle ever, the idea of bipartisan infrastructure stocks – that is, investment ideas both Democrats and Republicans love – sounds absurd. However, even in this acidic showdown, some common ground exists.
If you listen to the underlying messaging, it’s basically all the same stuff: America this, Americans that. It’s a time for politicians to make a bunch of unsubstantiated claims and promises that will likely never be fulfilled. However, our elected officials must keep up pretenses, which is excellent news for infrastructure stocks.
Basically, no politician can survive without at least appearing to do something to boost American jobs. And what better way to accomplish this than through a buildout? Whether it’s build back better or make America great again, below are three infrastructure stocks that both sides of the aisle agree upon.
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Summit Materials (SUM)
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Headquartered in Denver, Colorado, Summit Materials (NYSE:SUM) is a leading vertically integrated aggregates-based business. It supplies construction materials in the U.S. and western Canada. The aggregate materials include crushed stone, sand and gravel, which are used in various construction projects like roads, buildings and infrastructure. Since the beginning of the year, SUM gained nearly 13% of equity value.
Fundamentally, the advantage for Summit Materials is that irrespective of who takes the White House in 2024, the company and the wider construction industry should benefit. More than likely, one of the key economic messages will be getting Americans back to work. Therefore, SUM should easily be one of the infrastructure stocks to consider.
Looking ahead, analysts believe that Summit’s revenue for the current year should reach $4.48 billion. That’s well above last year’s sales of $2.62 billion, helping to explain the enthusiasm toward SUM stock. In 2025, experts forecast revenue to reach $4.77 billion.
Lastly, Wall Street rates shares as a consensus moderate buy with a $43.90 average price target. Notably, the high-side target goes up to $50.
Deere (DE)
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One of former President Donald Trump’s favorite companies, Deere (NYSE:DE) manufactures agricultural machinery, along with forestry and other heavy equipment. It also specializes in diesel engines and drivetrains that are used in said machinery. It’s an iconic American firm, speaking to the rich economic heritage of our nation.
However, the beauty of DE as one of the top infrastructure stocks is that current President Joe Biden can’t ignore it either. Again, one of the key messages in this political cycle will be about returning America back to normal and hence to greatness.
Still, despite the relevant narrative, DE stock slipped more than 8% since the start of this year. Over the past 52 weeks, it’s down nearly 13%. Part of the problem is the forward outlook. Basically, analysts believe Deere’s revenue will only land at $47.87 billion, down almost 14% from last year.
Still, experts also believe on average that DE stock can reach $421 over the next 12 months. If so, that would imply more than 14% upside potential. Combined with the company’s forward dividend yield of 1.6%, Deere could be intriguing.
Mueller Water Products (MWA)
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One of the largest manufacturers and distributors of fire hydrants, gate valves and other water infrastructure products in North America, Mueller Water Products (NYSE:MWA) is an incredibly boring enterprise. However, it should get a nice boost during this year’s political cycle. Indeed, MWA is up almost 9% so far this year, making it an enticing example of infrastructure stocks.
At least part of the enthusiasm could be centered on the viability of the business. In particular, the Biden administration has touted its credentials regarding water-related issues. It’s a top concern for the president. But it’s also the same for Trump. Back in 2019, then-President Trump remarked that Americans were having difficulty flushing their toilets efficiently.
Notably, shares are rising this year despite analysts projecting 2024 sales to reach $1.22 billion, down 4.5% from last year. At the same time, 2025 sales could jump to $1.3 billion.
For those speculating on the election cycle, the Street pegs MWA as a moderate buy with an $18 target. That implies about 17% upside potential.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.
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