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The 3 Smartest Infrastructure Stocks to Buy to Pave Your Way to Profits

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Infrastructure stocks are poised for significant growth as global economies look to revitalize and modernize aging infrastructure. With governments channeling substantial funding towards building and enhancing roads, bridges, utilities and energy projects, the infrastructure sector offers investors attractive long-term opportunities.

Right now the global economy is at a crossroads, as it battles with socio-economic instability and climate change. These two pressing issues are critical to building a society that is good for everyone, and not just the ones residing at the top. With the Infrastructure Investments and Jobs Act in full swing, these companies can help pave the way for a better future for Americans and those abroad. 

Now, let’s discover the top three infrastructure stocks to buy in 2024 and beyond!

Caterpillar (CAT)

An image of the Caterpillar tractor brand logo.

Caterpillar (NYSE:CAT) should need no introduction when considering the top infrastructure stocks to buy. The company remains the largest construction equipment manufacturer in the world and is well-positioned to deliver outsized returns for shareholders. 

Caterpillar will undeniably be the major beneficiary of the global infrastructure spending. Infrastructure investment fuels demand for excavators, bulldozers, backhoes and the vast array of more than 300 heavy equipment Caterpillar provides. While the company is cyclical in nature, it has maintained strong liquidity and growth over the years. The past 24 months were seemingly tough for the construction industry, as inflation and higher interest rates slowed construction activity. However, Caterpillar delivered record revenue and FCF in the 2023 fiscal year. The broader economy is showing strong signs of a recovery despite inflation remaining sticky. Ultimately, that is good news for Caterpillar, as the company set its sights on delivering long-term growth while returning capital to shareholders.

Deere & Co (DE)

Several John Deere vehicles are parked outside of a building.

Source: Jim Lambert / Shutterstock.com

Deere & Co (NYSE:DE), is another major player in heavy machinery, well-known for its agricultural equipment and forestry machinery. The company contributes significantly to infrastructure projects of all sizes, and its growth over the past years has largely been ignored by Wall Street.

With global population growth and urbanization driving demand for food and infrastructure, Deere’s machinery and heavy equipment play a pivotal role in meeting these needs. The company’s focus on precision agriculture helps enhance efficiency and productivity for farmers and construction professionals. Moreover, its diversified product line ensures resilience across various infrastructure market segments. Despite more difficult macroeconomic conditions, the company has continued to deliver strong year-over-year growth in revenue and net profits. More recently, Deere saw record revenue and net income in FY23. Even with lower projected growth for the 2024 fiscal year, Deere’s valuation is still very compelling, making it one of the best infrastructure stocks to buy now.

Sterling Infrastructure (STRL)

a highway interchange as viewed from above

Source: Shutterstock

Sterling Infrastructure (NASDAQ:STRL) stands out as one of the top infrastructure stocks to buy in 2024. The company has continued its streak of strong revenue and EPS growth while steadily growing its robust backlog of infrastructure projects. 

Sterling Infrastructure primarily concentrates on transportation infrastructure, heavy civil infrastructure and building solutions. The company takes on projects in areas like road and bridge construction, highways and airports. However, the company recently embarked on building data centers for a number of technology companies as demand for AI explodes at an unprecedented pace. That could be a huge catalyst for growth over the next decade. Additionally, Sterling delivered record revenue and profits in FY23, with gross margins expanding by 350 basis points. With management forecasting strong top and bottom-line growth in FY24, now is a great time to snap up shares while they’re still cheap.

On the date of publication, Terel Miles did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Terel Miles is a contributing writer at InvestorPlace.com, with more than seven years of experience investing in the financial markets.

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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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