I Think These 3 Canadian Stocks Could Ride the Infrastructure Boom

These three Canadian stocks could benefit from the infrastructure boom across engineering, utilities, transportation, and digital assets.

Key Points
  • The upcoming infrastructure boom includes diverse investments in power grids, city infrastructure, and transportation networks, with additional growth from AI data center demand.
  • WSP Global, Brookfield Infrastructure, and Stantec are well-positioned to capitalize on this trend, offering unique services and assets like consulting, asset operation, and specialized engineering.
  • These companies present diverse investment opportunities with a focus on long-term growth and potential profits from the infrastructure boom.

One of the biggest emerging themes on the market right now stems from the upcoming infrastructure boom. That spending isn’t coming from just highways and bridges. Increased spending on infrastructure is set to include power grid updates, new city infrastructure, and expanding transportation networks.

Additionally, some of that spending towards the infrastructure boom targets growth from AI data centre demand.

For investors, that opens up opportunities across several parts of the infrastructure industry. Here are three Canadian stocks that are particularly well positioned to benefit.

infrastructure like highways enables economic growth

Source: Getty Images

WSP Global

WSP Global (TSX: WSP) is one of the largest engineering and professional services companies on the planet. The company’s operations span transportation, buildings, environmental services, and power.

That puts WSP near the front of any infrastructure boom. That’s because before major projects can be built, they require engineering, design, planning, and consulting work. WSP provides those services without taking on the massive capital requirements of owning the completed infrastructure.

More importantly, there are already signs of that strong demand. In the most recent quarter, WSP reported a record-breaking $20.1 billion backlog. That reflects a 23% increase over the prior year.

That backlog gives WSP visibility into future work and makes the company a unique option for investors looking to benefit from the infrastructure boom.

That gives WSP exposure to infrastructure spending before many of those projects ever reach the construction stage.

Brookfield Infrastructure

Another company set to benefit from the upcoming infrastructure boom is Brookfield Infrastructure Corporation (TSX: BIPC). Brookfield owns and operates infrastructure assets. That includes utilities, transportation, midstream, and data infrastructure operations across the planet.

Not only does that position Brookfield as an intriguing growth pick for investors, but it also offers some diversification. That’s because the infrastructure boom isn’t focused on a single area.

Utilities need investment, and transportation networks need upgrades. The growing demand for cloud computing and AI is increasing the need for data infrastructure.

That data infrastructure investment is noteworthy for investors. The segment is one of the fastest-growing areas of infrastructure spending, and Brookfield’s exposure is significant. The company operates over 150 data centres with an operating capacity of 1.3 gigawatts.  

Brookfield is also unique in that the company offers a quarterly dividend. As of the time of writing, Brookfield offers a yield of 4.65%.

That combination of essential assets, growth, and dividends makes Brookfield an intriguing option in the infrastructure boom.

Stantec

Rounding out the three investments to consider in the infrastructure boom is Stantec (TSX: STN). Stantec is another engineering and consulting business, but it offers something different from WSP.

Stantec has significant exposure to water, environmental services, buildings, energy, and infrastructure projects. That makes Stantec an interesting option to consider as governments begin updating their essential infrastructure.

Demand for Stantec’s expertise has remained strong. At the end of the first quarter, the company reported a backlog of $9 billion. The backlog gives Stantec a solid base of future revenue while infrastructure investment expands.

Why these Canadian stocks could benefit from the infrastructure boom

WSP, Brookfield Infrastructure, and Stantec all offer exposure to infrastructure, with some variation.

WSP provides engineering and professional services across major global projects. Brookfield owns and operates the assets. Stantec provides another engineering angle with exposure to specialized areas such as water and environmental infrastructure.

The infrastructure boom will provide long-term growth opportunities. The three stocks mentioned above provide investors with multiple ways to profit from that opportunity.

Fool contributor Demetris Afxentiou has no position in any of the stocks mentioned. The Motley Fool recommends Stantec and WSP Global. The Motley Fool has a disclosure policy.

More on Stocks for Beginners

shopper chooses vegetables at grocery store
Dividend Stocks

Loblaw vs. Empire: Which Grocery Stock Would I Choose for Long-Term Growth?

Both grocers benefit from repeat shoppers. I’d give Loblaw the edge for the ways it can earn more from those…

Read more »

ETF is short for exchange traded fund, a popular investment choice for Canadians
Dividend Stocks

2 Top TSX ETFs to Buy and Hold in a TFSA Forever

Looking for top TSX ETFs for your TFSA? Explore how VFV and VDY combine U.S. stock exposure and Canadian dividends…

Read more »

middle-aged couple work together on laptop
Dividend Stocks

Dividend Income Outside a TFSA? The OAS Math I’d Check Before Buying More

A $1,000 dividend can add $1,380 to the income used to calculate your Old Age Security recovery tax.

Read more »

Senior uses a laptop computer
Energy Stocks

Enbridge vs. TC Energy: Which Pipeline Stock Fits a Retirement Portfolio?

Enbridge gives me the bigger cheque today. TC Energy makes a case for investors who want more exposure to growing…

Read more »

electrical cord plugs into wall socket for more energy
Energy Stocks

What $10,000 in Fortis Could Pay Now After Years of Dividend Growth

A $10,000 Fortis purchase could start with about $311 in annual dividends. Future raises are where the numbers get more…

Read more »

some investments are riskier than others
Dividend Stocks

5 Top Canadian Stocks to Buy and Hold With $1,000

Get tips on buying and holding stocks with strategic insights to maximize your investment returns and manage risks.

Read more »

Hourglass projecting a dollar sign as shadow
Stocks for Beginners

It’s Time to Buy: 1 Canadian Stock That Hasn’t Been This Cheap in Years

This Canadian stock has plunged nearly 49% in six months, but improving orders and major cost-saving initiatives could make this…

Read more »

data analyze research
Stocks for Beginners

TD’s Dividend Is Only Half the Investment Case: Here’s the Recovery Math

TD’s dividend pays you while you wait. The bigger payoff depends on how much more the bank can earn from…

Read more »