There are few better dividend stocks out there that offer as much growth and protection during downturns as infrastructure stocks. In fact, infrastructure stocks provide a strong investment strategy by providing stability, growth, and strong returns even during tough economic times.
Infrastructure stocks receive government support and stimulus packages, providing stability and gaining these funds, especially during downturns. These are important parts of the economy that drive economic growth, as they provide essential services. This, in turn, leads to recurring revenue that investors can look to for stability as well. Given the government and essential support these receive, infrastructure stocks are strong long-term holds as well.
So, let’s look at three stocks that investors will want to consider, as each continues its growth path.
Stantec (TSX:STN) currently holds a dividend yield of 0.90%, with shares up 34% year to date. The global engineering and consulting company offers a diverse portfolio of infrastructure assets. It provides both engineering and consulting and operates in everything from transportation and water to environmental services. These operations continue to grow around the world.
During its most recent earnings report, the growth stock reported net revenue that increased 17% to $1.2 billion over the first quarter of 2022. Adjusted diluted earnings per share increased 19.7% to $0.73. Its backlog climbed up to $6.2 billion, up 5.6$ since the last quarter and 14.8% since the first quarter of 2022.
What’s more, it was able to reaffirm its full-year 2023 guidance. Therefore, it looks like there is certainly an opportunity for more growth from this dividend stock in the near future.
Another strong option is SNC Lavalin (TSX:SNC), with a dividend yield of 0.23% and shares up 46% year to date. It’s also been on a tear, and for many of the same reasons as Stantec stock. SNC stock provides global assets in a variety of large infrastructure projects. Some of these projects include ones for the government, making them all but certain to be followed through. These contracts tend to be long-term in nature, with recurring revenue providing predictability for shareholders and protection during downturns.
During its last earnings report, SNC stock reported revenue increased 10.1% year over year to $1.8 billion, which outperformed the company’s own full-year outlook range of between 5% and 7%. Its backlog also reached a record high, totalling $12.1 billion, up 8% year over year. The company continues to find cost-saving methods to bring down expenses during this time of higher inflation.
It looks like with the company creating record results and beating its own conservative guidance, there could be even more growth on the way for this dividend stock.
Finally, perhaps the best option in terms of dividend growth is Brookfield Infrastructure Partners (TSX:BIP.UN). Brookfield stock is a globally diversified infrastructure company with a wide range of assets from renewable energy to telecommunications. It has continued to demonstrate the company’s resilience in even the most trying financial times, providing a diversified, predictable portfolio for investors to consider.
The company’s recent earnings report came in with net income at $23 million, which was far lower than the $70 million achieved the year before. Even still, this year provided benefits from contributions made from acquisitions and organic growth, and it was mainly market losses on commodity contracts creating a one-time transaction cost to bring down net income. Funds from operations were up 12%, with organic growth up 9%.
There are likely more acquisitions the company will take advantage of on the way, so look out for more growth — especially as it continues to offer a dividend yield at 4.28%, with shares up 10% year to date.