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Experts warn that the infrastructure deficit in the U.S. is stifling national competitiveness. At the same time, some of the nations of Northern Europe and Asia have built better systems be they, bullet trains, super highways or airports. China continues to build world class infrastructure that supports its chosen role as the manufacturing hub of the world.

American transport infrastructure was highly regarded just a decade ago but today the World Economic Forum does not place it among the top 20 nations. In fact, the American Society of Civil Engineers reportedly does not even give the nation’s infrastructure facilities a passing grade. While it is true that the U.S. may not have adequately invested in traditional facilities (such as roads, railways and airports), the super highways of the future are less likely to be built of asphalt and concrete and more likely to be in speed of computation and communications.

The passage of the Federal highway bill (aka Moving Ahead for Progress in the 21st Century) last summer is expected to provide a major fillip to transport infrastructure. MAP-21 legislation provides substantial funds to guide the development and growth of the nation’s transport infrastructure. The future looks promising for infrastructure given the bi-partisan discourse on the issue unlike divisive topics such as immigration or the budget. Here we take a look at a few companies which may benefit from the spotlight on infrastructure.

The Industrial & Infrastructure segment (about 41.5% of company-wide sales) of Fluor Corporation (FLR - Analyst Report) provides design, engineering, procurement and construction services, with respect to both new construction and refurbishment, in transportation and other sectors.

We believe that private-public partnerships will be critical for meeting funding requirements in transportation. One such recent example is the Fluor, Virginia Department of Transportation and Transurban tripartite effort which achieved major completion, in November 2012, of the I-495 Express Lanes in N. Virginia. Such cases demonstrate that Fluor holds a leadership position in private delivery of public infrastructure projects. Incidentally, Fluor is celebrating its centenary in 2012.

Fluor’s competitor Jacobs Engineering Group Inc. (JEC - Analyst Report) is one the largest providers of professional, technical and construction services. The company collaborates with state level departments of transportation to manage transport projects, such as its three year contract with the Washington State Department of Transportation to provide operational and engineering support to WSDOT’s rail enhancement program.

A comprehensive road building program may not be complete without Astec Industries, Inc. (ASTE - Analyst Report), America’s number one maker of equipment for asphalt road laying. The company sells equipment used in each phase of road building, from quarrying and crushing the aggregate to applying the asphalt. Its clients include asphalt road making contractors and it serves government agencies.

Astec’s customers depend on government funding for the construction and maintenance of the infrastructural projects. The company sees a window of opportunity as the economy recuperates and the burst of demand for gear will have to be acquired.

Texas Industries (TXI - Snapshot Report), with cement operations based in Texas, is strongly placed in the key domestic markets of California and Texas. The company recently reported bullish trends with firmer cement pricing and rising shipments. Texas Industries’ stock is up about 65% year to date compared with a 13.4% return from the S&P 500. Other key cement producers show a similar run up in their stock price. 

Caterpillar Inc. (CAT - Analyst Report), with interests ranging from housing to infrastructure, lowered its sales guidance for 2012 to $66 billion and its EPS expectation to between $9.00 and $9.25, citing weaker economic conditions across most parts of the globe. Nonetheless, this guidance, if realized, would mark the highest revenues and profit in Caterpillar’s history, even ahead of last year’s ground-breaking results.

In summation, America’s decrepit infrastructure, blamed for everything from delays to fatalities, must be rejuvenated as a part of a national renewal. Yet, at least at the bourses at this time, there may be relatively few winners in this space outside the cement sector.  

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