Bi-Partisan Yields: Caterpillar & Macquarie

07/21/2016 7:00 am EST


Jim Powell

Principal Analyst, Global Changes & Opportunities

This year there is one industry that both the Democrats and the Republicans like: infrastructure construction and repair, asserts Jim Powell, editor of Global Changes & Opportunities Report.

Both Mr. Trump and Ms. Clinton have repeatedly said they will pour billions of dollars into rebuilding our crumbling bridges, dilapidated airports, potholed freeways.

It would be difficult to find a company better positioned than Caterpillar (CAT) to benefit from an increase in infrastructure spending.

Wherever roads are being built, natural resources are being developed, or buildings are being erected, you will find Caterpillar.

I think this is an ideal time to buy Caterpillar. The global economic slowdown hurt sales and investors are down on the stock.

If you wish to take a position in CAT, do it now while most of the economic news is dark and new infrastructure projects have yet to be announced.

Once the outlook brightens, this favorite institutional stock will start to move up. It’s current 4.06% yield is an added inducement to buy.

Instead of building facilities, Macquarie Infrastructure (MIC) takes them over from government agencies that were losing money with them. The company then operates the services at a profit.

Macquarie currently manages 10 port facilities and at airports, it provides fuel and de-icing services, parking, and hanger operations.

As is true of Caterpillar, Macquarie is feeling the pinch of the global economic slowdown. However, that dark cloud has a silver lining.

The slow economy is reducing revenues for governments, which is forcing many to sell or lease out everything from airports to sewer systems.

For many agencies, the best solution to their budget problems is to have Macquarie run their facilities.

The stock is trading at an attractive level; I think it reward long-term investors. A 6.48% yield makes the investment all the more enticing.

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By Jim Powell, Editor of Global Changes & Opportunities Report

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