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Stocks & ETFs to Gain From Final Nod for Infrastructure Bill

Published 11/08/2021, 03:36 AM
Updated 07/09/2023, 06:31 AM

Wall Street has another reason to cheer as the U.S. House of Representatives has passed the more than $1-trillion infrastructure bill on Nov 5. The bill has now moved to President Biden for his signature. The legislation was approved in a 228-206 vote, per a CNBC article.

Earlier, the Senate passed the bipartisan infrastructure bill of $550 billion in addition to the previously-approved funds of $450 billion for five years in August. Total spending may go up to $1.2 trillion if the plan is extended to eight years.

According to the White House, the bipartisan Infrastructure Investment and Jobs Act would allocate $550 billion in new money to transportation projects, the utility grid and broadband (as stated in a CNBC article). The legislation also provides $110 billion for roads, bridges and other major projects along with $66 billion for passenger and freight rail and $39 billion for public transit.

The bill will also channelize $65 billion into broadband, a priority for many lawmakers after the pandemic brought into notice the unequal division in Internet access facilities for households and students across the nation (per a CNBC article). The bill will also invest $55 billion in water systems, including initiatives to replace lead pipes.

Commenting on the bill, President Biden has said that it would “create millions of jobs, turn the climate crisis into an opportunity, and put us on a path to win the economic competition for the 21st Century,” as mentioned in a CNBC article.

Stocks That Can Gain From the Approval

Leading producer of structural steel, steel bars, steel joists, steel deck and cold-finished bars in the United States, Nucor Corp. NUE can jump on the passage of infrastructure bill.

Another stock United States Steel (NYSE:X) Corp. X, which produces and sells flat-rolled and tubular steel products primarily in North America and Europe, is also expected to rise on the news.

Caterpillar Inc (NYSE:CAT). CAT, a manufacturer and seller of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives worldwide, can also be tracked.

Going on, Vulcan Materials Company (NYSE:VMC) VMC, which is engaged in the production, distribution and sale of construction aggregates and other construction materials in the United States and Mexico, may also ride the rally.

Crane Co. CR, which manufactures and sells engineered industrial products in the United States, Canada, the United Kingdom, Continental Europe, and internationally, can also gain on the news.

ETFs to Gain

Let’s take a look at some ETFs which can shine bright following the new infrastructure deal:

iShares U.S. Infrastructure ETF IFRA

The fund offers exposure to U.S. infrastructure companies that could benefit from a potential increase in domestic infrastructure activities. The fund has AUM of $737.8 million and charges 30 basis points (bps) in fees (read: Top ETF Stories of Third Quarter).

Global X U.S. Infrastructure Development ETF PAVE

The fund seeks to invest in companies that stand to benefit from a potential increase in infrastructure activity in the United States, including those involved in the production of raw materials, heavy equipment, engineering, and construction. The fund has AUM of $5.03 billion and charges 47 bps in fees.

Invesco Dynamic Building & Construction ETF PKB

The underlying Dynamic Building & Construction Intellidex Index comprises stocks of U.S. building and construction companies. The fund has AUM of $284.7 million and charges total expense ratio of 60 bps in fees (read: Will Housing ETFs Gain as US New Home Sales Rise in September?).

The Materials Select Sector SPDR Fund XLB

The most-popular material ETF follows the Materials Select Sector Index. This fund manages $8.29 billion in its asset base. The ETF charges 12 bps in fees per year from investors.

First Trust Nasdaq Transportation ETF FTXR

The fund's investment objective is to seek investment results that generally correspond to the price and yield, before the fund's fees and expenses, of an index called the Nasdaq US Smart Transportation Index. With AUM of $1.22 billion, the fund has an expense ratio of 60 bps (read: Transport ETFs Riding High Post Q3 Earnings).

Global X Autonomous & Electric Vehicles ETF DRIV

The fund seeks to invest in companies involved in developing autonomous vehicle technology, electric vehicles (EVs), and EV components and materials. This includes companies involved in the development of autonomous vehicle software and hardware as well as companies that produce EVs, EV components such as lithium batteries, and critical EV materials such as lithium and cobalt. The $1.20-billion fund charges 68 bps in fees (read: 5 ETFs Strategies to Play in November).

Vanguard Communication Services ETF VOX

The underlying MSCI US Investable Market Communication Services 25/50 Index is designed to capture the large, mid and small-cap segments of the U.S. equity universe. The fund charges 10 bps in fees and has AUM of $4.66 billion (read: Can Google (NASDAQ:GOOGL) ETFs Keep Gaining on Q3 Earnings Optimism?).

Invesco Water Resources ETF PHO

The underlying NASDAQ OMX US Water Index tracks the performance of U.S. exchange-listed companies that create products designed to conserve and purify water for homes, businesses and industries. The fund has AUM of $2.03 billion and charges 60 bps in fees (read: 5 Sector ETFs At All-Time Highs).

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Caterpillar Inc. (CAT): Free Stock Analysis Report

United States Steel Corporation (X): Free Stock Analysis Report

Nucor Corporation (NYSE:NUE): Free Stock Analysis Report

Vulcan Materials Company (VMC): Free Stock Analysis Report

Global X Autonomous & Electric Vehicles ETF (DRIV): ETF Research Reports

Invesco Water Resources ETF (PHO): ETF Research Reports

Crane Co. (CR): Free Stock Analysis Report

Materials Select Sector SPDR ETF (XLB): ETF Research Reports

Invesco Dynamic Building & Construction ETF (PKB): ETF Research Reports

Vanguard Communication Services ETF (VOX): ETF Research Reports

First Trust NASDAQ Transportation ETF (FTXR): ETF Research Reports

Global X U.S. Infrastructure Development ETF (PAVE): ETF Research Reports

iShares U.S. Infrastructure ETF (IFRA): ETF Research Reports

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Zacks Investment Research

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