Investors have no shortage of great long-term growth stocks on the market to choose from. Several Canadian stocks are positioned to benefit from the infrastructure boom.
Governments and businesses are spending heavily on upgrading aging assets. That includes replacing aging roads, transit systems, utilities, and water networks. At the same time, businesses are investing in power generation, transmission, data infrastructure, and more resilient supply chains.
The spending related to that initiative is, in a word, massive. And it won’t be allocated to a single budget cycle either.
Many of the infrastructure projects planned or underway will require significant investment over time. The longer timelines involved in infrastructure projects often lead investors to overlook that opportunity.
That creates several ways for investors to benefit from the trend. Some companies plan and design the projects, others help manage and execute them, and some own the essential assets that generate cash flow once those projects are operating.
Here’s a look at three Canadian stocks set to benefit from that infrastructure boom.
Source: Getty Images
WSP Global plans the projects before they’re built
WSP Global (TSX: WSP) is one of the largest professional-services firms on the planet. The company provides engineering, consulting, and design services across transportation, buildings, water, environmental services, and energy.
This makes the company an appealing option for investors looking to invest in infrastructure growth. That’s because WSP becomes involved well before construction begins.
Large projects need planning, environmental studies, technical design, and project management long before the first shovel hits the ground.
WSP also benefits from its global footprint, which reduces reliance on any single Canadian infrastructure program. This also sets up the company to benefit from spending across North America, Europe, and other markets where it has a presence.
For investors, WSP is one of the few Canadian stocks that is a growth-focused infrastructure play. This makes it an ideal holding as infrastructure spending continues to ramp up.
AtkinsRéalis offers engineering and nuclear expertise
AtkinsRéalis (TSX: ATRL) is yet another one of the Canadian stocks providing engineering and project-management exposure. Its operations span transportation, buildings, water, energy, and other essential areas of the economy.
Among those areas of expertise is nuclear power. This is an underrated advantage, especially as electricity demand continues to rise. The search for reliable, low-carbon energy to match that rising demand often leads to nuclear energy.
As a result, nuclear is becoming an increasingly important part of infrastructure growth.
More importantly, it’s not just new facilities being constructed. Existing facilities are being upgraded and undergoing extensive maintenance, which aligns well with the expertise AtkinsRéalis can offer.
Brookfield Infrastructure offers a different way to invest in essential assets
A third option for investors looking at Canadian stocks touching the infrastructure boom is Brookfield Infrastructure (TSX: BIPC). Brookfield Infrastructure offers a different take on infrastructure exposure.
Rather than helping to design and manage projects like AtkinsRéalis and WSP, Brookfield Infrastructure owns and operates those essential assets.
Brookfield Infrastructure’s portfolio includes utilities, transportation assets, and data infrastructure. Those assets are part of a global portfolio that has access to Brookfield’s broader capital platform. This allows the company to pursue acquisitions and invest in assets as opportunities emerge.
It’s worth noting that many of the businesses Brookfield Infrastructure owns and operates generate regulated or contracted cash flows.
This makes them appealing to income-seeking investors, which is a key difference from the other two Canadian stocks mentioned above.
Brookfield Infrastructure offers investors an attractive quarterly dividend that continues to see annual upticks. As of the time of writing, the company offers a yield of 4.6%.
These Canadian stocks offer different paths into infrastructure
Infrastructure spending is creating one of the biggest opportunities for long-term investors right now, and each of the three stocks mentioned above offers something unique.
WSP and AtkinsRéalis can benefit from the planning, design, and execution side of major projects. Brookfield Infrastructure provides exposure to the ownership and operation of the assets themselves.
In my opinion, one or all should be a small position in a larger, well-diversified portfolio.
