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2 TSX Stocks I’d Buy Right Now!

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Although the S&P/TSX Index has appeared to have stalled around 15,500, there are still attractive long-term buying opportunities in TSX stocks. One sector that is looking interesting is infrastructure.

As governments try to stimulate economies, we can expect a significant increase in infrastructure spending going forward. Just last week, it was reported that the White House is considering tabling a $1 trillion infrastructure plan.

If you have some cash that you want to invest right now, then here are two TSX infrastructure stocks that are setting up for some very long-term growth.

This TSX stock is building an infrastructure empire

The first name that I would happily put some money into is Brookfield Infrastructure Partners (TSX:BIP.UN)(NYSE:BIP). BIP owns infrastructure assets across the world. These include electricity transmission lines, pipelines, toll roads, ports, and data/cellular infrastructure.

Its stock is up about 35% since the March market crash; however, I believe it is still an attractive TSX stock today. Considering some of the market volatility, this is a very stable company to own. 95% of BIP’s cash flows are contracted or regulated. These contracts have internal growth escalators. Without any further acquisitions, it can still grow organically by around 6-9% per year.

Limited COVID-19 impact and upside from here

Some of BIP’s operations have been impacted by the pandemic crisis, but management expects only around 2% of 2020 earnings could be affected. I think the pandemic and ensuing economic crises could, in fact, create some attractive acquisition opportunities.

BIP already capitalized on the March market crash by buying and selling cheaply trading infrastructures stocks. However, I think they are patiently positioning for one or two large transactions later this year.

BIP’s stock pays a great 4.6% dividend right now. It targets to grow the dividend by 5-9% per year. This is a great TSX stock to hold in your TFSA. Or you can buy its corporate listing, BIPC, which may be more attractive for tax purposes in a non-registered account. Regardless, this stock is a perfect defensive stock that has attractive internal and external growth potential.

This TSX stock is consolidating the consulting world

Another great TSX infrastructure stock that I’d invest in right now is WSP Global (TSX:WSP). WSP is one of the world’s largest consulting, design, and engineering firms. The stock has been a growth by acquisition story for many years. Its stock price has almost doubled over the past five years.

WSP recently issued $500 million of equity. It hopes this will provide the financial flexibility to accelerate its immediate growth strategy. While investors never love seeing a company dilute its shares, I believe WSP is seeing the pandemic crisis as an opportunity to capitalize on smaller, capital-needy consulting firms.

Right now, the company has about $1.6 billion of liquidity available to deploy. There has been some speculation that Aecom, a U.S. infrastructure and technology consultant, could be a key target.

WSP is positioning for compounding long-term growth

WSP has a strong balance sheet, and it is financially well positioned to face any COVID-19 challenges. Likewise, it has a record-high, $8.5 billion backlog (11.1 months of revenue) and a balanced project portfolio. Over 50% of its projects are transportation and/or infrastructure related. Government infrastructure spending could be a real boon to WSP stock.

Although this TSX stock only pays a 1.8% dividend, the majority of returns will come from compounded growth through acquisitions. So far, WSP has done a great job integrating new firms and finding organic synergies. I think it is positioned perfectly to continue growing its consulting empire for many years to come.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Robin Brown owns shares of Brookfield Infrastructure Partners and WSP GLOBAL INC. The Motley Fool recommends BROOKFIELD INFRA PARTNERS LP UNITS and Brookfield Infrastructure Partners.

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