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The Top 3 Infrastructure Stocks to Buy in April 2024

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With the presidential election just months away, one of the hottest topics will be the nation’s infrastructure — especially after the bridge collapse in Baltimore, Maryland. All of which should be a strong catalyst for some of the top infrastructure stocks.

That bridge collapse also ignited calls to fix many of America’s aging bridges. In fact, according to Mary Kane, president and CEO of the Maryland Chamber of Commerce, noted, “This event has underscored the crucial role that our nation’s infrastructure plays in supporting the daily lives of our citizens and the smooth functioning of our economy.”

Worse, of the 617,000 bridges in the U.S., about 42% are more than 50 years old, says InfrastructureReportCard.org. About 46,154 of the bridges are considered to be of poor quality at the moment.

“We need to increase spending on bridge rehabilitation from $14.4 billion annually to $22.7 billion annually, or by 58%, if we are to improve the condition. At the current rate of investment, it will take until 2071 to make all of the repairs that are necessary, and the additional deterioration over the next 50 years will become overwhelming,” they added.

And that’s just the bridges. There are also issues with airports, dams, drinking water, energy, waste, ports, rail, roads, school and transit to name a few. While the U.S. no longer has a D- rating on infrastructure, we’re still in trouble with a C-, according to the American Society of Civil Engineers.

In short more money needs to be put into fixing our ailing country. All of which should fuel upside for some of the top infrastructure stocks to buy now.

Vulcan Materials (VMC)

Source: Shutterstock

Vulcan Materials (NYSE:VMC) is the nation’s biggest supplier of construction aggregates (crushed stone, sand and gravel, for example). It’s also a major supplier of asphalt mix and ready-mixed concrete. Helping, the company recently forecast its 2024 net earnings to rise to between $1.07 billion and $1.19 billion, which is higher than forecasts for $933 million.

“We expect pricing momentum and operational execution will lead to attractive expansion in aggregates unit profitability, regardless of the macro demand environment,” CEO Tom Hill said, as quoted by Reuters. All as the U.S. moves to upgrade transportation and non-residential projects as part of the $1 trillion infrastructure package.

Even better, Vulcan Materials’ recent dip to about $250 is a strong buy opportunity. VMC is also oversold on RSI, MACD, and Williams’ %R. From its current price of $258, I’d like to see it initially retest $275 a share. Even better, VMC currently carries a yield of about 0.71%.

Caterpillar (CAT)

The back of a Caterpillar (CAT) work vehicle displaying company logo

Source: Shutterstock

Another one of the top infrastructure stocks to buy is Caterpillar (NYSE:CAT), where weakness is an opportunity. While recent earnings were solid, its sales guidance wasn’t so hot. In its first quarter, the company posted adjusted earnings per share of $5.60 on sales of $15.8 billion. 

Analysts were looking for EPS of $5.14 on sales of $16 billion, though. Operating profit margins did improve to 22.3% from 17.2% year over year. Not helping, the company added that second quarter sales would come in lower than the $17.3 billion posted a year ago. CAT also said full-year revenue would be “broadly similar” to the $67.1 billion it saw in 2023.

With a good deal of negativity priced into the $25 drop, I’d use the weakness as a buy opportunity. With heavy demand for improvements to infrastructure, CAT will lead the way. Helping, JPMorgan recently raised its price target on CAT by $50 to $435. Morgan Stanley analysts also raised their price target on CAT by $57 a share to $327 per share.

iShares U.S. Infrastructure ETF (IFRA)

a highway interchange as viewed from above

Source: Shutterstock

We can also take advantage of the latest dip in the iShares U.S. Infrastructure ETF (NYSEMKT:IFRA).

After pulling back to support at around $41, the exchange-traded fund (ETF) is now up to $42.36. From here, I’d like to see it initially retest $43.50, with an eventual test of $50. 

With an expense ratio of 0.30%, the ETF tracks the investment results of “equities of U.S. companies that have infrastructure exposure and that could benefit from a potential increase in domestic infrastructure activities,” says iShares.com. It also holds 162 stocks, including NRG Energy (NYSE:NRG), Century Aluminum(NASDAQ:CENX), Dominion Energy (NYSE:D), Kinder Morgan (NYSE:KMI) and Granite Construction (NYSE:GVA) to name just a few.

Even better, we can gain access to all 162 stocks for less than $45 a share at the moment. In fact, we can buy 100 shares for about $4,500. Or, we can just buy one of the 162 holdings — let’s say 100 shares of NRG Energy for just under $7,300.

On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.

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