By Victor Reklaitis
President Joe Biden’s big speech on infrastructure is slated to come on Wednesday as he visits Pittsburgh. Analysts have been thinking about his push for spending $3 trillion or more on roads, clean energy, broadband and much more — including how to make money from it.
Stifel analysts covering specialty engineering, construction and related services have highlighted five stocks from those sectors, saying in a Monday note that they’re “ways to play the infrastructure spend.” The team of analysts focused on names that have merited “buy” ratings from their shop and that have high revenue exposure to “markets that would likely see investment.”
Here are Stifel’s five picks:
Dycom Industries /zigman2/quotes/205114296/composite DY -1.76% : “Estimated revenue exposure – 100%,” and the company is focused on “Telecom, Rural Broadband Deployment,” the analysts said.
Quanta Services /zigman2/quotes/203420082/composite PWR +1.24% : “Estimated revenue exposure – 69%. Power Grid, Telecom.”
MasTec /zigman2/quotes/207965492/composite MTZ +1.48% : “Estimated revenue exposure – 68%. 5G/ rural broadband, Renewable energy construction, Electric T&D [transmission & distribution].”
MYR Group /zigman2/quotes/202556876/composite MYRG -1.54% . “Estimated revenue exposure – 61%. Power Grid, Renewables, Rail, Schools, Energy Retrofits.”
Atlas Technical Consultants /zigman2/quotes/200081797/composite ATCX -0.26% : “Estimated revenue exposure ~25-35%. We note that while estimated revenue in markets that could be impacted by Infrastructure stimulus is high at ~59%, the high percentage of work performed on existing assets limits the exposure to some degree. Highways, roads, transit, Energy Retrofits/ Safety, Energy.”
Beyond those five stocks, the Stifel analysts said other beneficiaries in specialty engineering, construction and related services will include infrastructure rehabilitation company Aegion /zigman2/quotes/202646365/composite AEGN -0.20% (though they note it’s in the process of going private and only has a “hold” rating), as well as Emcor Group /zigman2/quotes/206859573/composite EME +1.43% , AZZ /zigman2/quotes/207538123/composite AZZ +1.97% , Tetra Tech /zigman2/quotes/208410672/composite TTEK +0.42% and Montrose Environmental /zigman2/quotes/219535298/composite MEG -1.98% .
Meanwhile, energy-sector analysts at Truist said in a Monday note that there is “a broad consensus for a high likelihood of a stand-alone storage ITC,” referring to an investment tax credit, with it coming “possibly in a Biden infrastructure package.”
That type of incentive “would further support the already robust growth outlook for the space,” the Truist team said.
Energy technology company Enphase Energy /zigman2/quotes/207948472/composite ENPH -3.89% and Sunrun /zigman2/quotes/205021014/composite RUN +11.69% , a provider of solar panels and batteries, both have indicated that the ITC has a strong chance of becoming a reality, the analysts said. Truist gives each company a “buy” rating.
Away from individual stocks, MarketWatch’s Phil van Doorn has written that the Global X U.S. Infrastructure Development ETF /zigman2/quotes/200238288/composite PAVE +0.71% might be your best way to take a broad approach at riding along with Biden’s infrastructure plan, and MarketWatch’s Andrea Riquier has listed PAVE among the ETFs poised to gain during Biden’s time in office .