Canadian Infrastructure Stocks
Investors who want to own a diversified portfolio of infrastructure companies rather than bet on individual stocks should consider infrastructure ETFs. Infrastructure Exchange Traded Funds (ETFs) provide companies that build and maintain major projects and systems such as highways, bridges, waterways, railways, communications networks and electricity grids. The infrastructure companies are Dominion Energy Inc. (D), Fortis Inc. (FTS) and Consolidated Edison Inc. (ED).
Two stocks that you should consider are Brookfield Infrastructure Partners L.P. and SNC-Lavalin Group Inc., Public infrastructure maintenance in Canada, including roads, bridges, public transportation, community buildings, water and sanitation projects, and is mentioned over 150 times. The term “infrastructure” was cherished as the key to the 2021 budget, which Chrystia Freeland unveiled on April 19.
Three of the leading infrastructure companies have a long history of creating shareholder value and are well placed to benefit from sector growth. Consider two stocks that could deliver good returns over the medium to long term.
As a leader in the ownership and operation of transportation infrastructure, Brookfield Infrastructure has a diversified global portfolio of transportation infrastructure companies. The company is a state-owned company that transfers ownership of infrastructure assets to the private sector to finance the maintenance and development of other infrastructure from which it can benefit.
Brookfield Infrastructure Partners, L.P. is a publicly-traded limited partnership headquartered in Toronto, Canada. The partnership is engaged on a global basis in the acquisition and management of infrastructure assets. Brookfield’s segments include utilities, transportation, energy and data infrastructure.
The best investments are high-quality companies that have been operating in the industry for decades. In addition, durable infrastructure assets are attractive because their returns are resilient and because Brookfield is constantly looking for ways to improve its operations and profitability. Insights like these make infrastructure stocks attractive assets and, as such, a great long-term investment.
Utility stocks are relatively safe, but several market conditions can lower their valuations. So try to buy them on a dip to get a discounted price and get a better return.
One of the best Canadian stocks today to buy offers investors a portfolio of high-quality infrastructure assets from around the world. Its long-term assets include ports, railways, toll roads, utilities, data centers, telecommunications towers, and much more. Infrastructure is not an investment in itself, but it has attractive global diversification and high-value assets.
It is also a top investment trust, which means it will effectively manage your capital over the long term. So Northland is a top choice if you’re looking for a top Canadian stock that you can keep for years. It’s a great stock to own in the long term and one of the best Canadian stocks I would buy today.
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IFRA tracks the NYSE FactSet US Infrastructure Index, an index composed of US companies that have benefited from increased infrastructure activity. The index includes information on various infrastructure companies, including railways, utilities, materials and construction companies and more. In addition, the Alerian Midstream Energy Select Index comprises a group of North American infrastructure companies involved in the transportation, storage and processing of energy raw materials, supporting Midstream Energy Infrastructure companies in North America.
The US Infrastructure Index of NYSE FactSet, an index composed of US companies benefiting from increased infrastructure activity, follows a mixed strategy of investing in a mix of value and growth stocks across the market cap spectrum.
Mississauga, Ont., is one of the most undervalued operators, says Maxim Sytchev of the National Bank. The company has come under criticism for its oil and gas exports. The company, heavily weighted by raw materials, derives 60% of its turnover from infrastructure.
VMC shares have risen 71% over the past 12 months and closed yesterday at $18.362, not far from the all-time high of $19.414 reached on May 10. Toronto, Canada’s largest stock index, recovered from heavy losses last week as a bipartisan infrastructure deal in the United States saw crude oil prices rise above $74 a barrel. The deal includes a focus on roads and transportation infrastructure in the U.S. However, it stands afoul of the reopening as the number of vaccinations continues to rise, said Macan Nia, a Senior Investment Strategist at Manulife Investment Management.
The August crude oil contract rose 7.5 percent to $74.05 a barrel, and the August natural gas contract rose 8.3 percent to $3.52 a mmBtu.
The COVID-19 pandemic has prompted both sides in Washington to act. As a result, many Canadian companies are awaiting economic stimulus in this sluggish environment. The truth is that the infrastructure process in Canada and the US has been slow. Still, recent pledges and signals that the government is giving the go-ahead for major projects could boost economic activity in infrastructure stocks and create jobs at a time of dire unemployment.
The downturn in the energy sector has hit Canada’s construction companies particularly hard, highlighting the vulnerability of local firms. Vishal Patel, portfolio manager at the Dynamic Fund, sees no great added value in the infrastructure sector. Retailers who benefit from infrastructure money and make it into the overall GDP buy better, he argues.
In terms of projects, AECON has won Transmountain and is working on two other projects, West Gordie Howe Bridge in Windsor. The stock has caught up with the TSX but still lags behind the index with a YTD YTD of 9.7%. It is also an income stream in infrastructure, pays a payout ratio of 4.45% to 5.459% and is traded at a PE of 13.57 x.
Christine Poole, who warns that overruns of costs on some projects could cause lawsuits against AECON, still likes the stock as it looks for the long term.