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The Hidden Gems of Infrastructure: Top 3 Stocks to Snap Up in March 2024

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The Hidden Gems of Infrastructure: Top 3 Stocks to Snap Up in March 2024

At a time when the spotlight is on undervalued infrastructure stocks, opportunities for investors are rife. The nation grapples with a multitude of infrastructure challenges, ranging from failing water systems to deteriorating highways, and the demand for solutions is mounting. With the backdrop of an election year, where infrastructure spending could take center stage, the potential for growth in this sector is palpable. For those seeking to capitalize on companies that provide critical infrastructure and logistical services, here are three standout stocks to consider today.

The Powerhouse: Enbridge (ENB)

Source: Shutterstock

Enbridge (NYSE:ENB) stands as a titan among midstream energy companies globally.

With a primary focus on pipelines, Enbridge is responsible for transporting about 30% of the crude oil produced in North America, as well as close to 20% of the U.S.’ natural gas output. Not stopping there, the company is the top producer of natural gas-powered electricity in North America and boasts a significant offshore wind portfolio.

Enbridge’s ace card lies in its vast network of operational pipelines, a key asset as regulatory and environmental barriers stymie the construction of new oil and gas conduits. Morningstar’s Stephen Ellis underscores the stock’s undervaluation, citing Enbridge’s advantageous position following setbacks such as the cancellation of the Keystone XL pipeline extension.

Flying High: Grupo Aeroportuario del Centro Norte (OMAB)

two women carrying luggage in an airport

Source: Shine Nucha / Shutterstock

Grupo Aeroportuario del Centro Norte (NASDAQ:OMAB) operates 13 airports in Mexico, primarily concentrated in the country’s northern region bordering the U.S.

The company plays a pivotal role in supporting Mexico’s manufacturing surge, with the country surpassing China as the U.S.’ primary trading partner in 2023 due to burgeoning manufacturing activities along the U.S.-Mexico border.

A significant feather in Mexico’s cap was securing Tesla’s new gigafactory, a substantial $5 billion investment near Monterrey. The city has witnessed a surge in industrial projects across various sectors, propelling Grupo Aeroportuario del Centro Norte’s flagship airport, Monterrey, to monumental passenger growth, hitting 13.3 million travelers in 2023 from 3.4 million in 2002, with a notable 21.8% spike year-on-year.

Despite its robust growth trajectory and strategic ownership of crucial logistical assets for North American manufacturing realignment, OMAB stock remains attractively priced, trading below 12 times forward earnings with a coveted 6.4% dividend yield.

Building Dreams: Fluor (FLR)

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

Source: Trong Nguyen / Shutterstock.com

Fluor (NYSE:FLR) operates as a prominent North American engineering, procurement, and construction (EPC) company, offering an array of services including project operations, maintenance, management, and asset integrity worldwide.

With the United States’ infrastructure aging rapidly, Fluor stands to benefit from an upsurge in contracts and potential market expansion. Both President Biden and former President Trump have emphasized infrastructure investment as a key agenda item, setting the stage for robust sectoral spending over the coming years, irrespective of the election outcome.

Moreover, Fluor has recently clinched a monumental $45 billion 10-year contract for environmental management activities at Washington state’s Hanford Site, reinforcing its position in the infrastructure domain. Trading at less than 14 times forward earnings, the company is poised for significant earnings growth amid a promising outlook for the engineering and infrastructure sector.

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.