The 3 Most Undervalued Infrastructure Stocks to Buy in March 2024

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It’s a great time to be looking for undervalued infrastructure stocks to buy. There are increasingly pressing matters across the board. From failing water systems to toxic waste sites, crumbling highways and bridges, and dilapidated ports and transportation terminals, it seems likely that the U.S. will up spending considerably to address these concerns.

In addition, it’s an election year. We could see new policy proposals around shoring up the nation’s infrastructure while creating new shovel-ready jobs. For investors looking to put some money into companies that help offer vital infrastructure and logistics services, these are three leading stocks to own today.

Undervalued Infrastructure Stocks: Enbridge (ENB)

Source: Shutterstock

Enbridge (NYSE:ENB) is one of the largest midstream energy companies in the world.

Enbridge’s bread and butter is in pipelines. It transports roughly 30% of crude oil produced in North America, along with almost 20% of the U.S.’ natural gas production. It is also the leading producer of electricity from natural gas in North America, and balancing that out, it also owns a sizable offshore wind portfolio.

Enbridge’s great advantage is that it already has a huge route network of built pipelines that are in operation today. This has become increasingly valuable given the increasing environmental and regulatory constraints against building new oil and gas pipelines.

Morningstar’s Stephen Ellis, for example, sees ENB stock as considerably undervalued. Ellis believes that the cancellation of the Keystone XL pipeline expansion and other such scuttled pipeline projects put Enbridge in the driver’s seat for capturing more volumes as the North American oil and gas production expands.

Grupo Aeroportuario del Centro Norte (OMAB)

two women carrying luggage in an airport

Source: Shine Nucha / Shutterstock

Grupo Aeroportuario del Centro Norte (NASDAQ:OMAB) is one of Mexico’s private airport holders. It operates 13 Mexican airports, with these primarily being in the northern part of the country near the border with the United States.

This has made Centro Norte a key player in providing the logistics infrastructure for Mexico’s manufacturing boom. To that point, Mexico overtook China as the United States’ #1 trade partner in 2023 amid a rush of new manufacturing activity along the U.S.-Mexican border.

Perhaps the most notable achievement for Mexico was in attracting Tesla’s (NASDAQ:TSLAnew gigafactory. It is expected to be a roughly $5 billion investment near the city of Monterrey. Monterrey has been a booming city recently, winning new plants in industries spanning steel, food and beverage, and medical devices, among others recently.

As it would turn out, Monterrey is Grupo Aeroportuario del Centro Norte’s key property. The Monterrey airport has grown traffic from 3.4 million passengers in 2002 to 13.3 million in 2023. Traffic at the Monterrey airport soared 21.8% in 2023 versus 2022.

Despite this favorable growth profile and the ownership of key logistics assets for the North American reshoring boom, OMAB stock remains cheap. Shares go for less than 12 times forward earnings and offer a 6.4% dividend yield today.

Fluor (FLR)

A Fluor (FLR) sign at the main entrance the Fluor headquarters in Irving, Texas.

Source: Trong Nguyen / Shutterstock.com

Fluor (NYSE:FLR) is a North American engineering, procurement, and construction (EPC) company. In addition to EPC operations, Fluor also provides project operating, maintenance, management, and asset integrity services worldwide.

Given the aging state of much of the country’s infrastructure, it seems likely that Fluor will be able to pick up more contracts. It will also be able to expand its addressable market over time. Both President Biden and former President Trump have emphasized infrastructure spending as a key political priority. Thus, this sets the stage for heavy spending in the sector over the next four years regardless of the outcome of the upcoming election.

And Fluor is picking up big wins right now. Last week, for example, Fluor scored a massive $45 billion 10-year contract. The contract was for overseeing environmental management operations at the Hanford Site in Washington state, related to the cleaning up of tank farm facilities.

Fluor is already trading for less than 14 times forward earnings. Earnings could be set to grow considerably, given a favorable outlook for the engineering and infrastructure space.

On the date of publication, Ian Bezek held a long position in OMAB and ENB stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund. You can reach him on Twitter at @irbezek.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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