Investing in overlooked infrastructure stocks is a great way to capitalize on the United States’ impending infrastructure boom. With the bipartisan Infrastructure Investments & Jobs Act in full swing, there are a number of companies that are set to be major beneficiaries.
The need to build new and upgrade existing infrastructure is crucial to spur growth and investment across the country. This surge in investment will go towards new highways, roads and bridges, power infrastructure, railroad freight, broadband and clean energy infrastructure. These initiatives present an incredible opportunity for investors to benefit from the increase in infrastructure spending.
Moreover, there exists a few lesser-known companies with significant upside potential. As both inflation and interest rates continue to moderate, these infrastructure stocks offer tremendous value for long term investors.
Now, let’s discover the top three overlooked infrastructure stocks you’ll regret not buying in 2024!
United Rentals (URI)
United Rentals (NYSE:URI), the world’s largest equipment rental company, stands out as one of the top overlooked infrastructure stocks to buy in 2024. With a vast network of locations across North America, United Rentals is the go-to company for construction equipment rentals for projects of all sizes.
United Rentals’ stock has been an absolute monster over the last five years. The stock has significantly outperformed the broader market, rising 512% as compared to the S&P 500’s 86%. After its small slump during the Covid-19 pandemic in 2020, the company made a strong recovery. This is a result of it consistently delivering high double-digit revenue, earnings, and free cash flow growth.
With global infrastructure spending on the rise, United Rentals is poised to benefit from increased demand for construction and industrial equipment. In Q1 FY24, revenue increased 6% year over year to $3.48 billion. Additionally, earnings per share swelled 24% year over year to $8.04 per share. With the acquisition of Yak Access now under its belt, URI remains well positioned to continue driving profitable growth in 2024 and beyond.
Eaton (ETN)
Eaton (NYSE:ETN), a multinational power management company, is another overlooked infrastructure stock that deserves your attention. The company delivered double-digit revenue and earnings growth over the last several years, and its outlook for 2024 remains strong.
Eaton operates in various market segments, but primarily specializes in electrical, hydraulic, and industrial control systems. Its products and services are essential for maintaining critical infrastructure, such as power grids, data centers, and transportation systems. As the world transitions to more sustainable energy sources, demand for its products will continue to rise. Additionally, Eaton’s strong backlog growth and guidance for the 2024 fiscal year is another show of confidence.
In the first quarter of 2024, revenue increased 8% year over year to $5.94 billion. Earnings per share rose 28% from the year prior, with record segment margins of 23.1%. Moreover, its electrical and aerospace divisions backlog grew by double digits, up 42% and 40%, respectively. After raising its full year earnings guidance for 2024, ETN stock is among the best infrastructure stocks to buy now.
Sterling Infrastructure (STRL)
Sterling Infrastructure (NASDAQ:STRL) is a hidden gem that is poised to thrive in the U.S. infrastructure boom. The company’s expertise spans a wide range of infrastructure services, including heavy civil construction, transportation and e-infrastructure solutions.
Sterling Infrastructure is one of the top overlooked infrastructure stocks that you should not take your eyes off in 2024. It has been around for decades and its growth-through-acquisitions strategy is finally starting to pay off.
Since the pandemic, Sterling’s profitability and free cash flow have increased substantially. Moreover, its backlog is growing at a record pace, providing the company with ample visibility out into 2025. After delivering record results in 2023, CEO Joe Cutillo aims to capitalize on AI-driven data center demand and strength in the aviation markets. In Q1 FY24, revenue increased 9% year over year to $440 million. Net earnings swelled 58% year over year to $31 million, with its backlog hitting a record $2.42 billion.
With growth trends remaining strong across all business segments, STRL stock is a great choice for investors seeking exposure to the infrastructure sector.
On the date of publication, Terel Miles did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
