When it comes to investing, infrastructure has never been the most exciting theme. However, some of the best long-term investments are often the businesses quietly keeping the economy running behind the scenes. And right now, as Canada continues investing heavily in infrastructure, there are plenty of high-quality stocks to consider today.
What’s especially attractive about the current environment is that the spending isn’t concentrated in just one area. From transportation and utilities to energy and industrial infrastructure, governments and businesses are investing across a wide range of projects that could create long-term opportunities for investors.
That’s because infrastructure spending doesn’t just benefit the companies building projects directly. It also creates demand for businesses that supply critical components and services, while also helping improve the economics of companies that rely on that infrastructure.
So, with that in mind, here are three top Canadian stocks that look well positioned to benefit from Canada’s infrastructure spending boom for years to come.
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A top Canadian infrastructure stock to buy and hold for years
There’s no question that one of the most popular infrastructure stocks to buy and hold for the long haul is Brookfield Infrastructure Partners (TSX:BIP.UN).
In fact, the company owns a globally diversified portfolio of assets across utilities, transportation, energy infrastructure, and data infrastructure. That means investors aren’t just getting exposure to Canada, but to infrastructure investment trends occurring around the world.
That’s why it’s such a reliable long-term investment. Its essential infrastructure assets generate recurring cash flow backed by long-term contracts or regulated frameworks. As a result, the business can continue producing stable cash flow while also benefiting from new investment opportunities.
So, Brookfield isn’t just a defensive income producer offering a current yield of 4.9%; it’s also a long-term growth stock, which is why it continues to be one of the most popular infrastructure stocks Canadians can buy today.
A top pick for exposure to Canada’s growing energy sector
In addition to Brookfield, another high-quality Canadian stock to buy now that can benefit from the long-term infrastructure boom is Canadian Natural Resources (TSX:CNQ).
Canadian Natural Resources may not be the first stock investors think of when discussing infrastructure spending, but it could be one of the biggest beneficiaries.
Canada continues to invest heavily in expanding energy infrastructure and improving access to international markets. At the same time, governments and businesses are increasingly focused on strengthening energy security and diversifying supply chains.
Those developments create opportunities for producers like Canadian Natural Resources because the company already owns some of the highest-quality assets in the industry and has one of the strongest cost structures among major producers.
So, as additional infrastructure comes online and export capacity expands, companies like CNQ are positioned to benefit from improved market access and stronger long-term economics.
And with management continuing to return significant amounts of free cash flow to shareholders, and the stock currently yielding roughly 4.2%, investors are being rewarded while they wait.
A top Canadian stock supplying infrastructure businesses
While Brookfield Infrastructure and Canadian Natural Resources are larger and more widely followed, Stella-Jones (TSX:SJ) may be the purest infrastructure play of the three.
The company supplies utility poles, railway ties, and other essential infrastructure products used throughout North America.
That’s a crucial business because utility companies constantly need to maintain and upgrade their networks, railways regularly replace aging infrastructure, and as governments and businesses continue investing in critical infrastructure projects, demand for Stella-Jones’s products remains highly resilient.
The company has also built an impressive track record of execution over the years, consistently growing its business while maintaining a strong balance sheet.
And because its products are essential to infrastructure development and maintenance, Stella-Jones can benefit whether the focus is on expanding networks or simply keeping existing systems operating efficiently.
So, if you’re looking for a long-term growth stock that can continue benefiting from Canada’s infrastructure boom, Stella-Jones is undoubtedly one of the top picks to consider today.
