How to Invest in Infrastructure

It is a well known fact that the infrastructure of the United States is in disrepair and certainly needs rebuilding. New infrastructure is needed and will continue to be needed. There are many ways you can profit also by investing in the companies that provide the equipment and products that are needed in building infrastructure.

So what exactly is infrastructure and how can we invest in it. Infrastructure is just about everything around us, including roads, bridges, schools, buildings, mass transit, water projects, communications and power.

It was recently stated that there is at least $136 billion worth of infrastructure projects that can be started right away. According to a 2005 report by the American Society of Civil Engineers, it would take $1.6 trillion over five years to address the countries infrastructure problems. And it is not just the United States this is a worldwide situation. Other countries will want to upgrade their own infrastructure.

Here are a few ideas in each category and this is not a total list of all infrastructure funds or stocks. Many of these ETFs and stocks have been hit hard by the recession, a rebound could occur in many of them.

 

Exchange Traded Funds and Mutual Funds

• IGF – Global infrastructure fund.
• GII – Macquarie Global Infrastructure 100
• SLX – Market Vectors Steel is 100% invested in industrial materials, international steel companies.
• PHO – Powershares Water resources, the companies in this ETF are involved with delivering drinkable water and managing and treating water.
• MXI – iShares S&P Global Materials is 95% invested in industrial materials.
• PZD – Powershares Cleantech, the wave of the future for new buildings, commercial and government will be more energy-efficient. And that is what this ETF invests in. This is a cross between green and infrastructure funds.
• FLM – First Trust ISE Global Engineering and Construction
• PKB – PowerShares Dynamic Building and Construction, only US companies.
• XLB – SPDR Materials Select Sector – 90% industrial materials and a high volume ETF.
• KGICX – Kensington Global Infrastructure fund.

Many of these have low volume at this time, which makes them volatile. FLM and the PKB invest in the engineering and construction aspects, which could benefit the most. Alternative energy companies could also be included in the infrastructure if new buildings will be required to have more solar for example.

Individual Companies

• ABB – ABB Ltd. Power and automation services for electric, gas and water utilities.
• FLR – Fluor Corp. Engineering, procurement and construction.
• JEC – Jacobs Engineering. Engineering, design, construction, architectural, consulting and modular construction.
• FWLT – Foster Wheeler provides engineering and construction services to the power plant, power generation and oil and gas industries.
• SGR – The Shaw Group is an engineering, technology, construction, fabrication, environmental and industrial services
• ACM – AECOM Technologies. They provide architecture, engineering, construction management, project management, asset management, and environmental consulting services to governments and industry including highways, airports, bridges, mass transit systems, government and commercial buildings, water and wastewater facilities, and power transmission and distribution.
• CX – Cemex is company in Mexico involved with the production, marketing and selling of cement and concrete.
• CBI – Chicago Bridge and Iron, which has their headquarters in The Netherlands, is an engineering, procurement and construction company.
• GVA – Granite Construction. Heavy civil construction contractor.
• MDR – McDermott provides services to US government owned facilities including environmental site restoration, power generation and boilers.
• TTEK – Tetra Tech Inc., consulting, engineering and technical services focusing on resource management and infrastructure.
• BKR – Michael Baker Corp. provides engineering, consulting, planning, construction management and surveying and architectural services the government and private sectors.
• PCR – Perini Corp. General contracting, construction management and design-build services to both the private customers and public agencies throughout the world.
• MIC – Macquarie Infrastructure Company. Owns, operates and invests in a diversified group of infrastructure companies mainly in the US.
• CAT – Caterpillar designs, manufactures markets and sales of construction, mining and forestry equipment.
• TEX – Terex Corp. Manufacturer of equipment for the construction, infrastructure, quarrying, surface mining, shipping, transportation, refining and utility industries.

This is a fairly comprehensive list of the major companies that should be involved with the infrastructure boom if there is to be one. As with any stock you’re thinking of buying you should know and understand exactly what that company does and you should have at least a fair understanding of that business. It would be helpful to read everything you can that relates to the building of infrastructure so you can decide along with all the analysts as to which companies are getting the right contracts.

Copyright © 2009-2014 Sam Montana