{"id":176969,"date":"2020-07-02T17:53:35","date_gmt":"2020-07-02T17:53:35","guid":{"rendered":"https:\/\/stockchase.com\/discover\/?p=176969"},"modified":"2020-07-02T17:53:35","modified_gmt":"2020-07-02T17:53:35","slug":"top-infrastructure-stocks-brookfield-stock","status":"publish","type":"post","link":"https:\/\/stockchase.com\/discover\/top-infrastructure-stocks-brookfield-stock\/","title":{"rendered":"Top 3 Infrastructure Stocks to Buy: Brookfield Stock Shouldn&#8217;t be Alone in your Portfolio"},"content":{"rendered":"<p lang=\"en-CA\">Truth is, the infrastructure process is notoriously slow in both Canada and USA, but recent commitments signal that governments are finally green lighting massive projects which will stir economic activity (and infrastructure stocks) and create jobs in a time of dire unemployment.<\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Discover What&#039;s Inside<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/stockchase.com\/discover\/top-infrastructure-stocks-brookfield-stock\/#Infrastructure_Spending_in_the_USA\" >Infrastructure Spending in the USA<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/stockchase.com\/discover\/top-infrastructure-stocks-brookfield-stock\/#Infrastructure_Spending_in_Canada\" >Infrastructure Spending in Canada<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/stockchase.com\/discover\/top-infrastructure-stocks-brookfield-stock\/#Top_Infrastructure_Stocks\" >Top Infrastructure Stocks<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/stockchase.com\/discover\/top-infrastructure-stocks-brookfield-stock\/#Infrastructure_Stock_1_Brookfield_Stock_BIPUN-T\" >Infrastructure Stock #1: Brookfield Stock (BIP.UN-T)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/stockchase.com\/discover\/top-infrastructure-stocks-brookfield-stock\/#Top_Infrastructure_Stocks_2_Aecon_ARE-T\" >Top Infrastructure Stocks #2 : Aecon (ARE-T)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/stockchase.com\/discover\/top-infrastructure-stocks-brookfield-stock\/#Top_Infrastructure_stocks_3_Caterpillar_CAT-N\" >Top Infrastructure stocks #3 : Caterpillar (CAT-N)<\/a><\/li><\/ul><\/nav><\/div>\n<h3><span class=\"ez-toc-section\" id=\"Infrastructure_Spending_in_the_USA\"><\/span>Infrastructure Spending in the USA<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span lang=\"en-CA\"> On June 4, Trump signed an <\/span><span style=\"color: #000080;\"><span lang=\"zxx\"><u><a href=\"https:\/\/www.usnews.com\/news\/politics\/articles\/2020-06-04\/trump-to-sign-executive-order-expediting-projects-subject-to-environmental-reviews\" target=\"_blank\" rel=\"noopener\"><span lang=\"en-CA\">executive order to hasten infrastructure spending<\/span><\/a><\/u><\/span><\/span><span lang=\"en-CA\"> (though waiving environmental requirements for projects like pipelines and highways). The bill would be worth nearly US$1 trillion. Two weeks later, the U.S. House <\/span><span style=\"color: #000080;\"><span lang=\"zxx\"><u><a href=\"https:\/\/www.post-gazette.com\/news\/politics-nation\/2020\/06\/22\/Infrastructure-package-Conor-Lamb-Guy-Reschenthaler-Donald-Trump\/stories\/202006170089\" target=\"_blank\" rel=\"noopener\"><span lang=\"en-CA\">Democrats moved forward on a $500-billion bill<\/span><\/a><\/u><\/span><\/span><span lang=\"en-CA\"> to upgrade America&#8217;s aging highways, bridges and trains over the next five years. <\/span><\/p>\n<p><span lang=\"en-CA\">The COVID-19 pandemic has finally provoked both sides of the aisle in Washington into action. In fact, the <\/span><span style=\"color: #000080;\"><span lang=\"zxx\"><u><a href=\"https:\/\/www.businessinsider.com\/asce-gives-us-infrastructure-a-d-2017-3?r=US&amp;IR=T\" target=\"_blank\" rel=\"noopener\"><span lang=\"en-CA\">American Society of Civil Engineers<\/span><\/a><\/u><\/span><\/span><span lang=\"en-CA\"> reckons that the States needs US$4.5 <em>trillion<\/em> by 2025 just to repair its roads, bridges, schools, dams and airports. <\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Infrastructure_Spending_in_Canada\"><\/span>Infrastructure Spending in Canada<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span lang=\"en-CA\"> Here in Canada in mid-May, Ottawa announced it would spend <\/span><span style=\"color: #000080;\"><span lang=\"zxx\"><u><a href=\"https:\/\/www.ctvnews.ca\/politics\/feds-unveil-new-covid-19-stream-for-provincial-infrastructure-program-1.4936060\" target=\"_blank\" rel=\"noopener\"><span lang=\"en-CA\">$3 billion on an infrastructure plan<\/span><\/a><\/u><\/span><\/span><span lang=\"en-CA\"> specifically targeting the pandemic. The plan would upgrade healthcare facilities and schools to make them more resistant to COVID and to encourage safe ways of transportation, like cycling. However, coordination between the federal and provincial governments have been slow.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Top_Infrastructure_Stocks\"><\/span>Top Infrastructure Stocks<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img decoding=\"async\" class=\"alignnone size-medium wp-image-177017\" src=\"https:\/\/stockchase.com\/discover\/wp-content\/uploads\/2020\/06\/BIP.UN-T-1-1-760x254.jpg\" alt=\"Brookfield Infrastructure Stocks\" width=\"860\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Infrastructure_Stock_1_Brookfield_Stock_BIPUN-T\"><\/span>Infrastructure Stock #1: Brookfield Stock (BIP.UN-T)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img alt=\"BIP.UN-T stock price chart\" decoding=\"async\" src=\"https:\/\/data.wealthica.com\/api\/securities\/BIP.UN-T\/chart?labels=tru\" width=\"125\" align=\"right\" \/>Part of the Brookfield empire, <a href=\"https:\/\/stockchase.com\/company\/view\/4020\/BIPUN-T\">BIP.UN<\/a> owns utilities, railroads, roads, ports, toll roads and natural gas pipelines, assets which provide stable cash flow. In fact, as of June 30, 2019, 95% of the <a href=\"https:\/\/stockchase.com\/company\/view\/4020\/BIPUN-T\">BIP stock<\/a> cash flows were regulated or contracted. The <a href=\"https:\/\/stockchase.com\/company\/view\/4020\/BIPUN-T\">Brookfield stock<\/a> is also diversified geographically, offering exposure to North and South America, Europe and Asia.<\/p>\n<p lang=\"en-CA\">The balance sheet looks healthy with limited short-term debt and boasting over $4 billion in liquidity. Brookfield management as a whole has a solid reputation, so investors are expecting <a href=\"https:\/\/stockchase.com\/company\/view\/4020\/BIPUN-T\">BIP.UN<\/a> to find opportunities in this uncertain world economy.<\/p>\n<p lang=\"en-CA\">2020 earnings are down around 8%, but YOY revenue growth is 89%. <a href=\"https:\/\/stockchase.com\/company\/view\/4020\/BIPUN-T\">BIP.UN<\/a> is an income earner that pays a safe 4.92% dividend that has risen annually in the last 13 years. However, if you want stock growth, you&#8217;re better off looking at the parent company of <a href=\"https:\/\/stockchase.com\/company\/view\/2403\/BAM-N\">BAM-T<\/a>. Since the March 23 bottom, <a href=\"https:\/\/stockchase.com\/company\/view\/4020\/BIPUN-T\">BIP.UN<\/a> has been rangebound between $50-55. Analyst <a href=\"https:\/\/stockchase.com\/expert\/view\/1313\/Greg-Newman\">Greg Newman<\/a> recently made this a top, defensive pick, and <a href=\"https:\/\/stockchase.com\/expert\/view\/1149\/John-OConnell-CFA\">John O&#8217;Connell<\/a> is a booster. (<a href=\"https:\/\/stockchase.com\/company\/view\/4020\/BIPUN-T\">BIP.UN<\/a> also trades in New York, but Canadian investors will avoid a tax hit by staying on the TSX.)<\/p>\n<p lang=\"en-CA\"><img decoding=\"async\" class=\"alignnone size-medium wp-image-177018\" src=\"https:\/\/stockchase.com\/discover\/wp-content\/uploads\/2020\/06\/ARE-T-1-760x254.jpg\" alt=\"Aecon\" width=\"860\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Top_Infrastructure_Stocks_2_Aecon_ARE-T\"><\/span>Top Infrastructure Stocks #2 : Aecon (ARE-T)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img alt=\"ARE-T stock price chart\" decoding=\"async\" src=\"https:\/\/data.wealthica.com\/api\/securities\/ARE-T\/chart?labels=tru\" width=\"125\" align=\"right\" \/><a href=\"https:\/\/stockchase.com\/company\/view\/83\/ARE-T\">Aecon<\/a> is another income stock in infrastructure, paying 4.45% at a 54.59% payout ratio and trading at a PE of 13.57x. EPS growth has been 12% per annum for the last five years. Its last four earnings report beat the street, and the eight analyst buys and three strong buys remains the same.<\/p>\n<p><span lang=\"en-CA\">Overall, the dividend continues to look safe. In terms of projects, <a href=\"https:\/\/stockchase.com\/company\/view\/83\/ARE-T\">Aecon<\/a> won <\/span><span style=\"color: #000080;\"><span lang=\"zxx\"><u><a href=\"https:\/\/www.aecon.com\/press-room\/news\/2019\/12\/17\/aecon-awarded-three-significant-contracts-in-british-columbia-alberta-and-ontario\" target=\"_blank\" rel=\"noopener\"><span lang=\"en-CA\">TransMountain<\/span><\/a><\/u><\/span><\/span><span lang=\"en-CA\">, which is finally underway, <\/span><span style=\"color: #000080;\"><span lang=\"zxx\"><u><a href=\"https:\/\/www.aecon.com\/press-room\/news\/2019\/12\/17\/aecon-awarded-three-significant-contracts-in-british-columbia-alberta-and-ontario\" target=\"_blank\" rel=\"noopener\"><span lang=\"en-CA\">two more projects out west<\/span><\/a><\/u><\/span><\/span><span lang=\"en-CA\">, and the Gordie Howe Bridge in Windsor. Those three western projects are valued at $420 million. <a href=\"https:\/\/stockchase.com\/company\/view\/83\/ARE-T\">Aecon<\/a> should also benefit from new spending by Ottawa and the provinces. Perhaps the stock will catch up the TSX; <a href=\"https:\/\/stockchase.com\/company\/view\/83\/ARE-T\">Aecon<\/a> lags the index YTD by -14.8% to -9.7%. <\/span><\/p>\n<p><span lang=\"en-CA\">A cautious note comes from <a href=\"https:\/\/stockchase.com\/expert\/view\/1274\/Christine-Poole\">Christine Poole<\/a>, who warns that cost overruns on projects can trigger charges for <a href=\"https:\/\/stockchase.com\/company\/view\/83\/ARE-T\">Aecon<\/a>; <a href=\"https:\/\/stockchase.com\/expert\/view\/1274\/Christine-Poole\">Poole<\/a> likes Aecon in the long run, but would look elsewhere for now. This could be a buy-on-pullback candidate.<\/span><\/p>\n<p><img decoding=\"async\" class=\"alignnone size-medium wp-image-177015\" src=\"https:\/\/stockchase.com\/discover\/wp-content\/uploads\/2020\/06\/CAT-N-1-760x254.jpg\" alt=\"Caterpillar\" width=\"860\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Top_Infrastructure_stocks_3_Caterpillar_CAT-N\"><\/span>Top Infrastructure stocks #3 : Caterpillar (CAT-N)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img alt=\"CAT-N stock price chart\" decoding=\"async\" src=\"https:\/\/data.wealthica.com\/api\/securities\/CAT-N\/chart?labels=tru\" width=\"125\" align=\"right\" \/>A symbol of construction, <a href=\"https:\/\/stockchase.com\/company\/view\/214\/CAT-N\">Caterpillar<\/a> has shown life in the past month with the stock performing nearly in line with the Nasdaq, after slumping during the lockdown when construction was entirely shut down. However, <a href=\"https:\/\/stockchase.com\/company\/view\/214\/CAT-N\">Caterpillar<\/a> has narrowly missed three of its previous four quarters, and analysts remain mixed on its prospects.<\/p>\n<p>The street has mixed thoughts:<\/p>\n<p lang=\"en-CA\">Bulls point to <a href=\"https:\/\/stockchase.com\/company\/view\/214\/CAT-N\">Caterpillar<\/a>&#8216;s track record. It has grown core earnings 22% compounded annually over the past decade. Since 2016, revenue has climbed 12% and core earnings by 54%, both compounded annually. Also, <a href=\"https:\/\/stockchase.com\/company\/view\/214\/CAT-N\">Caterpillar<\/a> has generated positive free cash flow in 15 of its last 20 years. To prepare for another down cycle, the company can access $27.6 billion in liquidity, which includes raising $2 billion cash by issuing 10- and 30-year bonds. On paper, <a href=\"https:\/\/stockchase.com\/company\/view\/214\/CAT-N\">Caterpillar<\/a> could operate for over eight months if there&#8217;s another complete shutdown (based on $3.1 billion Q1 monthly operating costs).<\/p>\n<p><span lang=\"en-CA\"> In contrast, the popular knock against <a href=\"https:\/\/stockchase.com\/company\/view\/214\/CAT-N\">Caterpillar<\/a> by bears is its strong cyclicality, and nobody expects strong global growth for the rest of 2020. Even before COVID, company sales growth declined 2% in 2019, although it jumped 18% and 20% in 2017 and 2018, respectively. The energy and transportation segments led the decline. Energy&#8217;s outlook is rocky, at best, though transportation is sunnier given the Democrats&#8217; plans. However, 44% of <a href=\"https:\/\/stockchase.com\/company\/view\/214\/CAT-N\">Caterpillar<\/a> the company&#8217;s sales come from construction equipment. Though reopenings have revived construction across the continent, a second American lockdown could be triggered by a spike in virus cases. <\/span><\/p>\n<p lang=\"en-CA\">The future is uncertain. It boils down to whether you believe Caterpillar is ready.<\/p>\n<p lang=\"en-CA\">Stay safe.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Truth is, the infrastructure process is notoriously slow in both Canada and USA, but recent commitments signal that governments are finally green lighting massive projects which will stir economic activity (and infrastructure stocks) and create jobs in a time of [&hellip;]<\/p>\n","protected":false},"author":12,"featured_media":177014,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"cwp_meta_box_check":"No","cwp_rev_product_name":"","cwp_rev_product_image":"","wppr_links":[],"cwp_rev_price":"","wppr_options":[],"wppr_pros":[],"wppr_cons":[],"footnotes":""},"categories":[17],"tags":[],"class_list":["post-176969","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-lists"],"wppr_data":{"cwp_meta_box_check":"No"},"_links":{"self":[{"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/posts\/176969","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/comments?post=176969"}],"version-history":[{"count":0,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/posts\/176969\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/media\/177014"}],"wp:attachment":[{"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/media?parent=176969"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/categories?post=176969"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/tags?post=176969"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}