The construction machinery industry stands to benefit handsomely from the recently approved infrastructure bill if it is ultimately passed into law. Therefore, Caterpillar (CAT) and Manitowoc (MTW) are well-positioned to witness substantial growth. But which of these stocks is a better buy now? Read more to find out.Caterpillar Inc. (NYSE:CAT) in Peoria, Ill., manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. In comparison, The Manitowoc Company, Inc. (NYSE:MTW), which is based in Manitowoc, Wisc., provides engineered lifting solutions in the Americas, Europe, Africa, the Middle East, and the Asia Pacific.
The heavy construction industry is expected to grow significantly in the near term in-part due to the U.S. Senate’s passage yesterday of a roughly $1 trillion bill to revamp the nation’s infrastructure. This once-in-a-generation investment plan (which now awaits passage in the U.S. House of Representatives) should increase the demand for construction machinery substantially over the long term, allowing heavy machinery stocks, CAT, and MTW to benefit significantly.
MTW has gained 73.2% over the past six months, while CAT has returned 8.3% over the period. Also, MTW’s 94.7% gains year-to-date compare with CAT’s 17.6% returns. But MTW’s 152.1% gains over the past year make it the clear winner, with CAT returning 50.7% over the same period.