President Joe Biden introduced the roughly $2 trillion American Jobs Plan today, and all of Wall Street has been paying close attention. Investors want to know one thing: What are good stocks to watch to benefit from the infrastructure bill?
Importantly, the American Jobs Plan covers many aspects of infrastructure. You have traditional proposals touching roads and bridges, as well as proposals for a national electric vehicle charging network. This means that beyond infrastructure stocks, investors should be watching EV stocks, fuel cell stocks and so much more.
If you want to profit from the plan, make sure you consider everything it covers. Dive in with InvestorPlace below for a top-notch list of stocks to watch.
Stocks to Benefit From Infrastructure Bill: Start Building
Grab your hard hat and get ready to start re-building your portfolio.
Unsurprisingly, a huge part of the $2 trillion infrastructure proposal focuses on transportation infrastructure and resilience. The American Jobs Plan aims to tackle a trillion-dollar backlog of needed repairs, and fixing American roads and bridges is a great way to drum up bipartisan support. That is because you probably cannot name a single district that does not have transportation infrastructure complaints.
So where is the money going? Biden is proposing allocating $115 billion for modernizing bridges, highs, roads and main streets. In addition to filling potholes, he sees this money helping to improve congestion and to improve the air quality in the surrounding locales. Biden also wants to allocate $20 billion to improve road safety, such as through increasing visibility to reduce crashes.
Looks for stocks to benefit from the infrastructure bill in this way? Try traditional plays like:
- Caterpillar (NYSE:CAT)
- Vulcan Materials (NYSE:VMC)
- Cummins (NYSE:CMI)
- United Rentals (NYSE:URI)
- Deere (NYSE:DE)
- U.S. Steel (NYSE:X)
- iShares U.S. Infrastructure ETF (BATS:IFRA)
Investors should also consider popular play Brookfield Infrastructure Corporation (NYSE:BIPC ).
In terms of road safety, Iteris (NASDAQ:ITI) is an interesting play for its roadway sensors, traffic intersection management and traffic signal solutions.
Electrifying the United States
Another key component of the American Jobs Plan focuses on all things electric. Acknowledging that China dominates the electric vehicle market, Biden wants to help the U.S. take the lead. To do so, he is proposing allocating $174 billion to boost EV adoption.
In practice this will look like tax incentives and consumer rebates, as well as a federal electric vehicle charging network that includes 500,000 charging stations by 2030. He is also calling on Congress to help the U.S. manufacture more of the necessary components. This would further increase the ability of the government, businesses and consumers to turn to EVs.
So what should you be watching in terms of stocks to benefit from the infrastructure bill? Look to U.S. electric vehicle makers. Tesla (NASDAQ:TSLA) shines, especially as a player in solar and residential energy storage. Then you have:
Battery plays like QuantumScape (NYSE:QS) could also see a boost.
High-Speed Broadband for All
When you think of infrastructure, you likely think of roads and bridges. If you are particularly environmentally conscious, you may also think about electric vehicles. However, as the American Jobs Plan highlights, another key component of infrastructure spending is giving access to high-speed broadband to everyone in the U.S.
During Covid-19, this unequal access has been particularly painful. For those unfamiliar, high-speed broadband specifically refers to high-speed that is always on and is fast. With reports emerging of students struggling to complete virtual assignments due to poor connections, broadband access has been in the spotlight.
Biden wants to change that. He has proposed investing until the U.S. reaches 100% coverage. For communications-focused real estate investment trust Crown Castle International (NYSE:CCI), that sounds like a profitable opportunity. Crown Castle says it helps connects towns and cities to necessary data, technology and wireless service.
Investing in Clean and Safe Drinking Water
Biden wants all Americans to have clean and safe drinking water. He also wants drinking water to stay safe — calling out a lack of infrastructure resiliency in the United States. The American Jobs Plan highlights how Hurricane Laura caused $19 billion of damage, particularly devastating water systems in Louisiana. To prevent future incidents and to improve water access for Americans now, he is proposing $50 billion in infrastructure resiliency investments. He is also calling on Congress to invest $45 billion in the Drinking Water State Revolving Fund and the Water Infrastructure Improvements for the Nation Act. Lastly, he has made it a goal to remove lead from water and water pipes.
What does this mean for investors?
There are a handful of companies that specialize in all things water. American Water Works (NYSE:AWK) specializes in water and wastewater services. Importantly, the company currently provides 15 million people across 46 million states with drinking water. Other stocks to benefit from the infrastructure bill include California Water Service (NYSE:CWT) and Primo Water (NYSE:PRMW).
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.