Biden Bets? Look to These Infrastructure and Renewables Stocks

What stocks stand to benefit the most should vice-president Joe Biden win in November? Two standout sectors -- according to several leading investing experts and contributors to MoneyShow.com -- are infrastructure and clean energy. Jim Powell, Global Changes & Opportunities If Mr. Biden becomes president, I expect to see legislation that favors infrastructure projects. The long-overdue program to upgrade our roads, bridges, airports, and other critical infrastructure should finally get underway. An infrastructure build-out is particularly likely because Mr. Biden -- and most other Democrats -- are eager to pump a great deal more money into the economy to help fight the Covid-19 recession. No other program has the potential to put as many people to work or help as many companies. The proposed national infrastructure program is being called, the New, New Deal. If there is a Democratic sweep of Congress and the White House, infrastructure companies should do even better. Caterpillar should be one of the biggest winners of an infrastructure building program. Most infrastructure projects require the heavy lifting and material moving capacity that Caterpillar's equipment can provide. A national infrastructure program will also lead to increasing commercial demand for Caterpillar products. Vulcan Materials should also prosper from an infrastructure renewal program. The company is America's largest supplier of sand, crushed rock, asphalt, concrete, and other unexciting -- but essential -- construction materials. These construction-related products will be needed in vast amounts for many years. I think Vulcan Materials is a long-term, slam-dunk that deserves a place in your portfolio. Fluor Corp. , the world's largest publicly traded construction firm, should be considered by aggressive investors; this fallen angel infrastructure stock has the potential to make a dramatic rebound if Mr. Biden wins the presidency. The company has a long and successful track record building big ticket projects, including many of FDR's New Deal public works, several rebuilding projects in New Orleans after Hurricane Katrina, and over a dozen U.S. military facilities in Iraq - to name only a few. Mr. Biden also continues to support a blockbuster clean energy program. As with our infrastructure stocks, there is enough political and economic pressure to support clean energy that it should do well no matter what happens on November 3. If a construction project is big, costly, complicated and essential, Fluor can build it. Starting several years ago, Fluor entered a tough period during which big construction projects were put on hold. Those projects can't be put off much longer, which should be good news for Fluor. The company carries more risk than Caterpillar or Vulcan, but I believe it has greater potential for appreciation. Meanwhile, a Democratic sweep would probably supercharge wind and solar developments. My top clean energy recommendations continue to be SunPower and Vestas Wind Systems . Although no investment is a guarantee for long-term success, clean energy comes as close to that mark as Wall Street ever gets. No matter who wins the November presidential election, clean energy should grow rapidly because it is finally becoming competitive with energy produced by fossil fuels. Mr. Biden is a long-term supporter of technologies that will reduce the production of CO2 that is thought by most scientists to be a main contributor to climate change. Mr. Biden recently put clean energy at the center of a $2 trillion plan to revive the U.S. economy. The goal is to reach net-zero CO2 emissions by 2050. Green New Deal supporters want the target date to be changed to 2035 -- and will probably get their wish. Matthew Miller, CFRA Research's The Outlook The general election is fast approaching and uncertainty regarding the outcome could lead to heightened market volatility. What Wall Street fears the most is a clean sweep with the Democrats regaining control of the presidency as well as both houses of Congress, given the prospects of higher taxes and more regulation. A clean sweep in November, however, may likely be the best-case scenario for a large infrastructure bill to finally get to the finish line, which could be a significant positive catalyst for construction materials companies. The most important product for construction materials companies in aggregates (crushed stone, gravel, sand, etc.), and the most aggregates-intensive public works projects relate to surface transportation (roads and bridges). Eagle Materials , Martin Marietta Materials , Summit Materials , and Vulcan Materials are poised to enjoy a long-term tailwind from higher infrastructure spending in the U.S, amid pent-up demand to refurbish and upgrade America's aging infrastructure. Our top pick among these stocks is Summit Materials, which has been one of the fastest-growing construction materials companies in the U.S. over the past three years, increasing its revenue by 55% between 2016 and 2019. SUM is vertically integrated, and the company offers its customers a single-source provider for construction materials and related downstream products. The company supplies aggregates across the U.S. and in British Columbia, Canada, and cement, which SUM supplies to states along the Mississippi River. In addition to supplying aggregates to customers, SUM also uses a portion of its materials internally to produce ready-mix concrete and asphalt paving mix, which may be sold externally or used in its paving and related services businesses. SUM's four largest states by revenue accounted for 57% of 2019 sales: Texas (22%), Kansas (13%), Utah (12%), and Missouri (10%). Sean Brodrick, Wealth Wave Renewable energy production is projected to increase fivefold in the next decade. That will take it from roughly 100 gigawatts (GW) of installed capacity today to around 500 GW in 2030. What could really kick solar -- and wind -- into overdrive is if Democratic presidential nominee Joe Biden is elected. He has committed to the Green New Deal, which, among other things, boosts America's commitment to renewable energy -- solar, wind and hydro. We can expect a Biden administration to renew the solar Investment Tax Credit (ITC), which started at 30% but drops to 26% this year, 22% in 2021 and zero in 2022. The ITC has sparked an average 54% increase in installations since its inception. Another development is transparent solar cells for windows. Researchers at the University of Michigan have developed an organic (carbon-based, rather than conventional silicon) color-neutral solar cell with 8.1% efficiency and 43.3% transparency. The U.S. Department of Energy Solar Energy Technologies Office and the Office of Naval Research back this technology, so expect to see this on building projects in the near future. In fact, the U.S. military is investing in solar as a cost-saving measure. A 1.1-megawatt floating solar power system is being tested at Fort Bragg right now. Biden could win, he could lose -- I'd say his odds are 50-50. So, we want investments that can ride the big trend already in place -- and that stand to cash in if the Green New Deal becomes policy. So how can you play it? There are, in fact, three very liquid alternative energy ETFs you can buy: The iShares Global Clean Energy ETF -- This fund invests in 30 companies tracked in the S&P Global Clean Energy Index and is weighted toward solar. It has an expense ratio of 0.46%. My Supercycle Investor subscribers already own it. The Invesco Solar ETF -- This fund holds a basket of 28 solar-leveraged stocks tracked in the MAC Global Solar Energy Index. It has an expense ratio of 0.71%. The First Trust ISE Global Wind Energy Index Fund -- This fund holds a basket of 45 wind-leveraged stocks tracked in the ISE Global Wind Energy Index. It has an expense ratio of 0.62%. These funds will help you do well. When it comes to wind and solar, the sky's the limit on profit potential. Angelo Zino, CFRA Research's The Outlook Solar investors will have a lot to be excited about should we see a Blue Wave this fall. While all solar providers could benefit, we see the biggest winners as U.S.- based SunPower , SolarEdge Technologies , and First Solar . For starters, Biden has proposed a plan to leverage $2 trillion in subsidies for renewable projects, which would help enable the realization of a 100% clean electricity standard by 2035. If enacted, it is a very ambitious plan that could boost annual solar demand by nearly five-fold from current levels over the next eight years. In fact, our base case assumes that the run rate of solar installations would be more than 2.5x by the end of Biden's first term compared to where solar demand would be in the U.S. should Trump be re-elected for a second term. We think Democrats -- if they win -- are likely to extend the Investment Tax Credit (ITC). We view the ITC as the lifeblood for solar demand in the U.S. At the federal level, the ITC has gone through several cycles of enactment and expiration over the last 30 years. Separately, Biden is looking to increase the corporate tax rate back to 28% from 21%, which would increase the value of solar tax credits and likely increase the pool of the tax equity financing market. While the timing of Biden's tax objectives remains an unknown, we think it would likely come within the first two years of his potential presidency. Finally, we expect Biden will put the U.S. back into the Paris Climate Accord. The Obama-Biden Administration was very effective, in our view, in supporting new renewable initiatives and placing limitations on carbon pollution. We see a potential Biden administration reentering the Paris Climate Accord on day one of the new regime. Risks to the analysis and recommendations include a potential Trump reelection or inability for Democrats to take control of Congress.

Biden Bets? Look to These Infrastructure and Renewables Stocks

Leading investing experts weigh in on what stocks stand to benefit the most should Joe Biden win the presidency in November.

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