How to Invest in Infrastructure Repairs
An investor might arrange across-the-board exposure by investing in an infrastructure mutual fund. These usually have a global focus, rather than dealing with any coming American build-out.
These mutual funds are usually resistant to economic downturns, for the simple reason that governments the world over spend, spend, spend when the economy is bad. A great deal of that money is spent on infrastructure.
The Morgan Stanley Global Infrastructure Fund Class A (MUTF: UTLAX) maintains exposure to worldwide infrastructure spending. Morningstar gives it a five-star rating overall. It's currently trading at less than half its early 2000s highs, but has been on a consistent upswing over the past four years.
Pasadena, CA-based Jacobs Engineering Group Inc. (NYSE: JEC) should play a role in any attempt to upgrade the national infrastructure base. The company has a worldwide presence on engineering and infrastructure projects. Jacobs works in places that are considerably further behind than the United States.
About 87% of the shares are institutionally owned, and the company pays no dividend. The stock has shot from $33.61 to $56.59 over 52 weeks, and is sitting fairly close to its 52-week high now.
URS Corp. (NYSE: URS) is another huge construction and engineering firm that operates all over the world. The company has operated since 1904, going through a long-lived round of expansion in the 1970s and 1980s.
URS is a one-stop shop for infrastructure build-out, offering everything from architectural services to consulting to construction. This stock, now at nearly $49, is also trading close to its 52-week high, and yields 1.73%.
If you're looking to play the nuts and bolts side of this road-building enterprise, consider a construction equipment company, like Kubota Corp ADR (NYSE: KUB). The company's stock has had a big year, with a 52-week run from $40.61 up to $88.38. The stock has settled somewhat and is now in the upper $70 range.
Kubota is based in Osaka, Japan, but has worldwide operations, with Gainesville, GA's Kubota Manufacturing of America producing front loaders, backhoes, and all manner of construction equipment. Kubota has at least four American subsidiaries, employing American workers under mostly American management.
Repairing all of America's infrastructure, bridges and roads included, is going to cost about $3.6 trillion, but the savings in lost time, maintenance, and even human life are going to be well worth the cost.
As things stand, ASCE estimates that close to 42% of America's urban highways remain congested, costing us $101 billion in wasted time and fuel.
But with a newly upgraded highway system, complemented by efficient rail and aviation networks, the United States would be well on the road to regaining its place at the top in transportation.
For more on how to invest in U.S. infrastructure repairs, check out Stocks to Buy Now Before the U.S. Infrastructure Spending Boom
Related Articles:
- Federal Highway Administration:
Infrastructure - American Society of Civil Engineers:
2013 Report Card For America's Infrastructure - The Street:
10 Best Construction Stocks for 2013
David Zeiler 31 May, 2013
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Source: http://feeds.moneymorning.com/~r/moneymorning/jOLe/~3/CHH9Lj9T9p0/
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