Spreadsheet data updated daily

Updated on June 29th, 2021 by Bob Ciura

Upgrading the nation’s infrastructure is a pressing need in the United States. U.S. infrastructure—which includes things like highways, bridges, railroads, and more—is in dire need of investment.

As a result, it is possible that a major upgrade of U.S. infrastructure is about to take place. If an infrastructure deal eventually passes, such an ambitious plan could amount to huge business opportunities.

Naturally, investors might want to know which companies would benefit from a massive investment in U.S. infrastructure.

With this in mind, we created a list of over 170 infrastructure stocks. These are companies from a variety of industries, that would benefit from infrastructure spending in some way.

You can download a spreadsheet with all our infrastructure stocks (including important financial metrics such as dividend yields and price-to-earnings ratios) by clicking on the link below:

The stocks in the table were derived from four infrastructure ETFs: the iShares U.S. Infrastructure ETF (IFRA); the iShares Global Infrastructure ETF (IGF); the SPDR S&P Global Infrastructure ETF (GII); and the ProShares DJ Brookfield Global Infrastructure ETF (TOLZ).

These ETFs include stocks from a variety of industries that support the building and maintenance of infrastructure assets. Industry groups include energy infrastructure such as oil and gas pipelines, steel producers, manufacturers of construction machinery, and more.

In addition to the Excel spreadsheet above, this article covers our top 10 best infrastructure stocks today.

The following 10 stocks all have strong business models and global competitive advantages. They all pay dividends to shareholders, and will be among the biggest beneficiaries of rising infrastructure spending in the United States.

The table of contents below allows for easy navigation.

Table of Contents

Our top 10 infrastructure stocks are listed below, in no particular order. The list was compiled based on a combination of quantitative and qualitative factors, including business model strength, competitive advantages, and dividend attractiveness.

Additionally, you can see this analysis as a YouTube video from Rick Orford below.

Keep reading to see our top 10 infrastructure stocks analyzed in detail.

Infrastructure Stock #1: Landmark Infrastructure Partners LP (LMRK)

Landmark Infrastructure Partners provides real estate on a lease basis to wireless carriers for their cell towers, to advertising operators for their outdoor displays, to power companies for their renewable energy units and to data storage companies for their data centers.

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Source: Investor Presentation

The MLP uses triple net leases with contractual rent escalation. It thus achieves organic growth without incurring any capital expenses. It owns properties in difficult-to-replicate locations in major population centers and leases them to Tier 1 tenants, such as AT&T (T) and Verizon Communications (VZ), which easily meet their rent obligations even under the most severe economic conditions.

Landmark Infrastructure Partners has positive growth prospects ahead, primarily thanks to the nationwide rollout of 5G, which will require densification of the existing cell tower networks.

Early signs of a recovery have already shown up in this segment of the MLP. Advertising activity bottomed at the end of the second quarter of 2020 and has been gradually recovering since then. As the pandemic subsides, we expect the recovery of the advertising segment to gain even greater momentum later this year.

Landmark Infrastructure Partners struggled last year due to the pandemic. In 2020, the MLP grew its funds from operations per unit 5% but it slashed its distribution by 46% in order to preserve cash and endure the crisis.

Nevertheless, Landmark Infrastructure Partners is a high dividend stock with a 6.3% distribution yield.

Infrastructure Stock #2: Enterprise Products Partners LP (EPD)

Enterprise Products Partners is a Master Limited Partnership that operates as an oil and gas storage and transportation company. Enterprise Products has a tremendous asset base which consists of nearly 50,000 miles of natural gas, natural gas liquids, crude oil, and refined products pipelines. It also has storage capacity of more than 250 million barrels. These assets collect fees based on materials transported and stored.

In early May, Enterprise Products reported strong first-quarter results in which distributable cash flow increased 12% to $1.73 billion. The company generated a DCF coverage ratio of 1.7x for the first quarter. Enterprise Products also retained $746 million of DCF for the first quarter of 2021.

We believe Enterprise Products has positive long-term growth potential moving forward, thanks to new projects and exports. In 2021 and 2022, Enterprise Products sees growth capital expenditures of $1.6 billion and $800 million, respectively. In all, Enterprise Products has $3.4 billion of major projects under construction.

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Source: Investor Presentation

In terms of safety, Enterprise Products Partners is one of the strongest midstream MLPs. It has credit ratings of BBB+ from Standard & Poor’s and Baa1 from Moody’s, which are higher ratings than most MLPs. The company also had a modest leverage ratio of 3.3x in the trailing 12 months.

Another attractive aspect of Enterprise Products is that it is a recession-resistant company. Enterprise Products’ high-quality assets generate strong cash flow, even in recessions. As a result, Enterprise Products has been able to raise its distribution to unitholders for 22 consecutive years. Units currently yield 7.6%.

Infrastructure Stock #3: Vulcan Materials Company (VMC)

Vulcan Materials Company is another clear winner among the nation’s infrastructure stocks, as it is the largest producer of construction aggregates. This includes crushed stone, sand and gravel. Vulcan is also a large producer of aggregates-based construction materials, including asphalt and ready-mixed concrete.

In the 2021 first quarter, total revenue increased 1.8% year-over-year. The company generated significant margin expansion, which resulted in 47% growth of adjusted EPS from continuing operations for the quarter.

The company’s aggregates business led the way last quarter with revenue growth and margin expansion.

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Source: Investor Presentation

The company maintains a strong financial position. Last quarter it ended with a 2.0x total debt to trailing-twelve month adjusted EBITDA ratio, or 1.4x on a net-debt basis reflecting $891 million of cash on hand. And, the company’s weighted-average debt maturity is 15 years, and its effective weighted-average interest rate is 4.6%.

Maintaining a strong balance sheet is important for the company’s ability to invest in growth, which it does organically and through acquisitions. For example, on June 7th Vulcan Materials announced it will acquire U.S. Concrete Inc. (USCR) for a total equity value of $1.294 billion.

USCR is a major supplier of aggregates and ready-mixed concrete, and will complement Vulcan Material’s existing operations. USCR operates in large metropolitan areas with 27 aggregates operations serving California, Texas and the Northeast. USCR shipped 12.6 million tons in 2020, meaning it will instantly boost Vulcan Material’s growth while providing significant opportunities for cost synergies.

Vulcan Materials is a dividend stock with a fairly low yield of 0.8%. This is below the average S&P 500 Index yield, which currently stands around 1.4%. However, the company routinely increases its dividend at a high rate, including a 9% raise in February 2021.

Infrastructure Stock #4: Caterpillar Inc. (CAT)

Caterpillar is an obvious choice for this list, as it is the largest heavy machinery company in the United States. Caterpillar manufactures heavy machinery used in the construction and mining industries. The company also manufactures ancillary industrial products such as diesel engines and gas turbines. Therefore, Caterpillar is one of the top infrastructure stocks.

Last year was a difficult one for Caterpillar, as it is a highly cyclical company that needs a healthy global economy. However, the company continued to generate positive free cash flow, which allowed it to continue returning cash to shareholders through the pandemic.

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Source: Investor Presentation

2021 has brought significant recovery for Caterpillar, as the coronavirus pandemic ends. On April 29th, 2021 Caterpillar reported Q1 2021 results for the period ending March 31st, 2021.

For the quarter the company reported revenue of $11.9 billion, representing an increase of 12% compared to Q1 2020, driven by higher enduser demand and increased dealer inventories. Adjusted earningspershare equaled $2.87 compared to $1.65 in the year ago period. Caterpillar ended the quarter with $11.3 billion of enterprise cash.

Caterpillar’s most important future growth catalyst is the continued growth of the global economy. Steady GDP growth in the U.S. and around the world will naturally result in higher demand for heavy machinery. An infrastructure spending plan would provide a significant boost to Caterpillar’s core construction business.

Caterpillar’s strong growth has allowed the company to raise its dividend at a high rate over the past several years. On June 9th, Caterpillar increased its dividend by 8%. Caterpillar has increased its dividend for over 25 consecutive years, qualifying the stock as a Dividend Aristocrat. You can see all 65 Dividend Aristocrats here.

We believe Caterpillar’s dividend is safe. With a projected dividend payout ratio of 45% for 2021, Caterpillar’s dividend is secure barring a deep and protracted recession.

Infrastructure Stock #5: Martin Marietta Materials (MLM)

Martin Marietta Materials is a leading supplier of various construction materials, including aggregates, cement, ready-mixed concrete and asphalt. As a result, MLM would be a big winner from a nationwide effort to improve and expand infrastructure. MLM operates a network spanning 26 states, along with Canada and the Bahamas.

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Source: Investor Presentation

In early May, the company announced strong first-quarter financial results. Total revenue increased 2.5% to $982 million. Both the company’s major segments, Building Materials and Magnesia Specialties, posted year-over-year revenue growth. Adjusted EBITDA increased 37% year-over-year, due to revenue growth and margin expansion. Earnings-per-share more than doubled in the first quarter.

Organic growth through an expanding economy will provide future growth for MLM, as will acquisitions. For example, the company recently announced the acquisition of Tiller Corporation. The Tiller business will complement MLM’s product offerings, while also broadening its geographic reach.

MLM pays a dividend to shareholders, but the yield is fairly low at 0.6%, although the company does increase its dividend on occasion, such as a 4% increase in 2020. Still, the stock is not likely to generate meaningful returns from dividends; instead, capital gains through high earnings growth will provide the bulk of shareholder returns moving forward.

Infrastructure Stock #6: Nucor Corporation (NUE)

Nucor Corporation is the largest steel producer in North America, which would make it a clear winner from a major new round of infrastructure spending.

Nucor manufactures a wide variety of material types, including sheet steel, steel bars, structural formations, steel plates, downstream products, and raw materials. The majority of the company’s production comes from a combination of sheet and bar steel, as has been the case for many years.

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Source: Investor Presentation

Despite operating in the notoriously volatile raw materials sector, Nucor is also a remarkably consistent dividend growth stock. The company has increased its annual dividend for 48 consecutive years, which qualifies it to be a member of the Dividend Aristocrats list. Nucor has the longest streak of annual dividend increases among our top infrastructure stocks.

On 04/22/21, Nucor reported firstquarter 2021 earnings. The company’s Q1 earnings stood at $3.10, up significantly from $0.07 yearoveryear. The company’s net sales increased 33% from a year ago. Furthermore, its 7.18 million tons shipped to outside customers in Q1 increased fell 0.2% compared to the yearago quarter. Q1 average sales price per ton increased 21% quarteroverquarter and 25% yearoveryear.

Meanwhile, Nucor forecasts EPS of $3.29 for Q2 and $9.05 for the full year. Overall operating rates at the company’s steel mills in the first quarter increased to 95% from 87% sequentially and 89% in the yearago quarter.

We expect 2%-3% annual EPS growth over the next five years for Nucor, which should allow the company to continue growing its dividend each year.

Infrastructure Stock #7: Kinder Morgan Inc. (KMI)

Kinder Morgan is among the largest energy companies in North America. It is engaged in storage and transportation of oil and gas, and other products. It owns an interest in or operates approximately 83,000 miles of pipelines and 144 terminals.

Its pipelines transport natural gas, refined petroleum products, crude oil, carbon dioxide (CO2) and more. Kinder Morgan’s transportation assets operate like a toll road, whereby the company receives a fee for its services, which generally avoids commodity price risk. Approximately 90% of Kinder Morgan’s cash flow is fee-based.

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Source: Investor Presentation

On April 21st, 2021 Kinder Morgan reported its firstquarter financial results. The company reported Q1 NonGAAP earningspershare of $0.60 and GAAP earningspershare of $0.62. The quarterly dividend increased by 3% to $0.27 per share. Net income attributable to Kinder Morgan totaled $1.41 billion, compared to a net loss of $306 million in the yearago period.

First quarter’s distributable cash flow per share increased to $1.02 from $0.47 yearoveryear. Meanwhile, the company’s natural gas transport volumes declined 3% yearoveryear. That said, Kinder Morgan expects to produce a net income of $2.7 billion to $2.9 billion, declared dividends of $1.08 per share, distributable cash flow of $5.3 billion, and adjusted EBITDA of $7.6 billion to $7.7 billion.

The company also aims to end 2021 with a 3.9x to 4.0x net debttoadjusted EBITDA ratio. The company’s financial position should secure the dividend, which currently yields 6%.

Kinder Morgan is a major energy infrastructure stock, as it is the largest natural gas transporter, moving approximately 40% of the natural gas used in the U.S. It is also the largest independent transporter of petroleum products and carbon dioxide, and the largest independent terminals operator.

Infrastructure Stock #8: MPLX LP (MPLX)

MPLX, LP is a Master Limited Partnership that was formed by the Marathon Petroleum Corporation (MPC) in 2012. The business operates in two segments: Logistics and Storage – which relates to crude oil and refined petroleum products – and Gathering and Processing – which relates to natural gas and natural gas liquids (NGLs).

The company’s Logistics and Storage segment has pipeline capacity of 4.7 million barrels per day.

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Source: Investor Presentation

On May 4th, 2021 MPLX released Q1 2021 results for the period ending March 31st, 2021. For the quarter Net Income equaled $739 million compared to a loss of $2.72 billion in Q1 2020. Distributable cash flow (DCF) equaled $1.137 billion (~$1.10 per unit) versus $1.078 billion (~$1.02 per unit).

Results were slightly better on a per unit basis as a result of a lower unit count. MPLX ended the quarter with a consolidated debt to adjusted EBITDA ratio of 3.9x (down from 4.1x in Q1 2020). Distribution coverage equaled 1.56x compared to 1.44x in the year ago period.

MPLX has positive growth prospects, due primarily to its projects currently under development. MPLX is an attractive MLP for income with a forward yield above 9%.

Still, even a significant cut would leave a very high yield, and barring another fierce downturn the distribution appears safe, particularly if the economy continues its recovery in 2021.

Infrastructure Stock #9: Brookfield Infrastructure Partners (BIP)

Brookfield Infrastructure Partners is one of the largest global owners and operators of infrastructure networks, which includes operations in sectors such as energy, water, freight, passengers, and data. Brookfield Infrastructure Partners is one of four publicly-traded listed partnerships that is operated by Brookfield Asset Management (BAM).

Brookfield Infrastructure Partners is a large-cap stock with a market capitalization above $20 billion.

Brookfield performed relatively well in 2020, given the economic downturn. FFO-per-unit increased 2.3% for 2020, and 12% in the fourth quarter. Along with quarterly results, BIP also raised its distribution by 5%, the 12th consecutive annual increase.

Strong performance continued in the 2021 first quarter. A breakdown of BIP’s first-quarter results can be seen in the image below:

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Source: Investor Presentation

The company has expanded its diversified portfolio of quality infrastructure assets in recent years. More recently, in February 2021 BIP offered to buy Inter Pipeline (IPPLF) for C$13.5 billion (US$10.6 billion). Inter Pipeline has refused the offer on the grounds that it believes the offer undervalues the company.

Going forward, BIP will likely continue to deliver attractive FFO per share growth. We expect 8.0% annual FFO-per-unit growth, while the MLP also offers a nearly 4% yield. As the payout ratio is estimated to be about ~60% this year, the cash distribution is very safe. What adds to BIP’s dividend safety is that its FFO is very stable.

Since 2012, FFOPS has remained stable or has steadily increased every year. The infrastructure that the company provides is needed during recessions as well, which is why FFO would likely remain relatively stable during a downturn or economic crisis. BIP also maintains a solid investment-grade credit rating of BBB+.

Infrastructure Stock #10: Union Pacific (UNP)

Union Pacific is the largest railroad company in the country and operates more than 32,000 miles of rail throughout the western twothirds of the country. Union Pacific transports industrial and agricultural products, as well as coal and chemicals. The company generates $21 billion in annual revenues.

On 4/23/2021, Union Pacific announced first quarter earnings results. Revenue fell 4.4% to $5 billion, which was $30 million below estimates. GAAP earningspershare of $2.00 was 7% lower than the prior year and $0.06 lower than expected. Union Pacific’s operating ratio was 110 basis points higher to 60.1% and compared unfavorably to consensus estimates of 59.1%.

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Source: Investor Presentation

Bulk volumes decreased 2% while revenue was lower by 1%. Grain exports remain very strong as volumes were higher by 16%. Coal demand remains weak, causing volumes to decline 16%. Declines in the Industrial category accelerated sequentially as volumes and revenue were both down doubledigits. One positive was a 7% increase in shipments of Forest Products due to demand for housing starts.

Earningspershare have increased at a rate of almost 9% per year over the past decade, and by 10.3% over the past five years. We expect 7% annual EPS growth over the next five years. Railroads are natural beneficiaries of infrastructure spending, and Union Pacific is optimally positioned as the largest railroad.

Union Pacific has increased its dividend for 13 consecutive years, making it a blue chip stock.

Final Thoughts

The 10 infrastructure stocks on this list are derived from a variety of industries, such as oil and gas, steel, energy infrastructure, investment in infrastructure assets, and more. But what they all have in common is that they stand to benefit from a massive infrastructure spending plan.

U.S. infrastructure is in need of a major face-lift. These 10 infrastructure stocks could benefit from higher demand for oil, gas, steel, and related services. The 10 stocks on this list all pay dividends, and should capitalize on infrastructure spending.

Thanks for reading this article. Please send any feedback, corrections, or questions to support@suredividend.com.

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