President Biden’s ambitious $2.25 trillion infrastructure bill proposal has kicked conventional infrastructure stocks into the spotlight. Unveiled last week, the plan sent a wave of optimism through investors. The plan doesn’t just aim at a massive overhaul of the nation’s roads, bridges, and pipelines, it also promises to create nearly 19 million jobs…
According to Goldman Sachs, the plan’s total expenditure would be in the range of $2 trillion to $4 trillion over the next decade. Consequently, companies with exposure to construction, water infrastructure, and road building will have significant growth opportunities. Furthermore, Biden’s ‘Build Back Better’ plan includes proposed investments in high-speed internet and green energy, among other investment proposals. Hence, in the near term, some ‘alternative infrastructure’ companies could also be beneficiaries of the proposed spending. .
Thus, adding core infrastructure stocks Eaton Corporation, Plc (ETN – Get Rating), Jacobs Engineering Group Inc. (J – Get Rating), Herc Holdings Inc. (HRI – Get Rating), and MasTec, Inc. (MTZ – Get Rating) will position investors for substantial gains in the long run. These stocks are fundamentally strong, and we think the proposed infrastructure package will be a major growth catalyst for them.
Click here to check out our Infrastructure Sector Report for 2021
Eaton Corporation, Plc (ETN – Get Rating)
ETN is an Irish company that manufactures engineered products for the industrial, vehicle, construction, commercial, and aerospace markets. Hydraulic products, control equipment, fluid connectors, electrical power distribution, and engine components are some of the products it produces .
During the fourth quarter, ended December 31, 2020, ETN’s net sales declined 10.9% year-over-year to $4.7 billion. Its organic sales fell 5%, while its divestitures of Lighting and Automotive Fluid Conveyance businesses lowered its sales by 8%. Its EPS for the quarter rose to $1.19 from $1.09 posted in the same period last year. Its operating cash flow at the end of the quarter was $943 million.
Analysts expect ETN’s revenue for the quarter ending March 31, 2021 to be $1.6 billion, representing a 13.9% year-over-year increase. Its EPS is expected to grow at the rate of 57.7% per annum over the next five years.
ETN climbed 90.7% over the year to close Thursday’s trading session at $139.49. Over the past six months, the stock has gained 38.7%.
It’s no surprise that ETN has an overall B rating, which equates to Buy in our POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.
ETN has a Momentum rating of A and Sentiment and Quality ratings of B. In the A-rated Industrial – Machinery industry, it is ranked #10 of 87 stocks.
In addition to the POWR Ratings grades we’ve just highlighted, one can see the ETN ratings for Growth, Stability, and Value.
Jacobs Engineering Group Inc. (J – Get Rating)
J is an engineering company that offers technical, professional, and construction services to various industrial, commercial, and governmental clients.
J’s revenue for the first quarter ended January 1, 2021 rose 0.6% year-over-year to $3.4 billion. Its EPS for the quarter climbed to $1.96, indicating 47% year-over-year growth. The company’s backlog increased to $25.1 billion, up 11% from the same period last year. J ended the quarter with $95.9 million in free cash flow and $112.6 million in cash flow from operations.
A consensus revenue estimate for J for the quarter ending March 31, 2021 is $3.5 billion, representing a 1.6% year-over-year rise. Its EPS is expected to grow at the rate of…
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