2 Stocks to Buy as Biden Pushes for Infrastructure Spending

President Joe Biden has been touting the need for modern infrastructure since his election campaign. He has advocated the need for modern and sustainable infrastructure to pull the economy out of recession as well as make the country more competitive with respect to the global economy. Biden has outlined a plan to invest $1.30 trillion in the country over the next ten years, catering to affordable housing infrastructure and adaptive infrastructure for sustainable development…

With such substantial infrastructure spending, the US economy is expected to rebound quickly. The country’s gross domestic product (GDP) is expected to register a growth of 4.2% between 2020 and 2024, and 2.9% between 2020 and 2030. Hence, I expect companies like Otis Worldwide Corporation (OTIS – Get Rating) and Graco Inc. (GGG – Get Rating) to significantly benefit in the long run.

Otis Worldwide Corporation (OTIS – Get Rating)

Based in Connecticut, OTIS is the world’s leading elevator and escalator manufacturing, installation and servicing company. It operates through two segments — New Equipment and Service. The company sells its products directly to customers, as well as through agents and distributors globally.

Earlier this month, OTIS was selected to support Canada’s critical infrastructure segment as the country is expanding its public transportation. Otis will supply hundreds of elevators and escalators for six distinct projects across Toronto, Montreal, and Ottawa. This would substantially enhance OTIS’ revenues.

Last December, OTIS achieved a noteworthy milestone, wherein its flagship Gen2 elevator has sold over 1 million units. The Gen2 elevator has made a lasting impact on the global building industry by showcasing the company’s commitment to sustainable technology.

OTIS’ fourth quarter results reflected the resiliency of its business model and strength of the long-term strategy. The company’s net sales increased 4.2% year-over-year to $3.49 billion in the fourth quarter that ended December 31, 2020. Its adjusted operating profit increased 7.6% from the year ago value to $509 million, while net income improved 15.1% to $251 million over the same period.

Analysts expect OTIS’ revenues to rise 6% year-over-year to $3.14 billion in the current quarter ending March 31, 2021. The consensus EPS estimate of $0.62 in the current quarter indicates a 3.3% rise from the year-ago value. The company has an impressive earnings surprise history; it has beat the Street EPS estimates in each of trailing four quarters. The stock has gained 28.6% over the past nine months.

OTIS’ strong fundamentals are reflected in its POWR Ratings. The POWR Ratings are calculated by taking into account 118 different factors with each factor weighted to an optimal degree.

The stock has an overall rating of B, which equates to Buy in our proprietary rating system. OTIS also has a Grade of B for Growth, Stability, and Quality. Of the 89 stocks in the A-rated Industrial – Machinery industry, OTIS is ranked #13.

In total, we rate OTIS on eight different levels. Beyond what we stated above, we also have given OTIS grades for Momentum, Value and Sentiment. Get all of OTIS’s ratings here.

Graco Inc. (GGG – Get Rating)

Based in Minneapolis, GGG supplies technology and expertise for the management of fluids in both industrial and commercial applications. The company designs, manufactures, and markets systems and equipment to move, measure, control, dispense, and spray fluid and powder materials. GGG operates through three segments: Industrial, Process, and Contractor.

Earlier this month, GGG purchased…

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