Infrastructure investment opportunities abound as economic development legislation advances. At the same time, COVID relief programs have ended or are coming to an end while returning college students are having trouble finding a place to live.
Bill Offers Infrastructure Investment Potential
The $1.2 trillion infrastructure bill is beginning to move through Congress. As a result, infrastructure investment shot up last week. However, there may still be money to be made on companies that will benefit from the legislation.
The Senate is expected to pass the measure the weekend or early next week. Then the landmark legislation will head to the House. There some progressive Democrats who have expressed concern that the bill will not address climate change and social ideas. However, President Biden contends those issues will be addressed in separate legislation.
If the measure becomes law, there will be many infrastructure investment opportunities. Pundits and advisors have been touting their favorite infrastructure plays. While those investments vary, several have been cited by multiple experts.
Vulcan Materials Company (VMC)
No, this business is not run by Spock. Vulcan produces construction materials such as crushed stone, sand, gravel, asphalt, and ready-mixed concrete. In addition, Vulcan is in the process of acquiring U. S. Concrete. That firm supplies many of the same materials as Vulcan to infrastructure, residential and commercial construction projects. The purchase is seen as an effort to expand Vulcan’s market reach in California, Texas, and the Northeast.
Stock and Profits Rising
Vulcan stock is up 110 percent over last year. In addition, both net income and earnings per share are up 166 percent. If that wasn’t enough, the company is sitting on $722 million in cash.
Caterpillar may be a more familiar name than Vulcan, but its stock may present more of a play.
The Deerfield, IL company posted second-quarter 2021 sales and revenues of $12.9 billion, a 29% increase over the same quarter last year.
“Operating profit margin was 13.9% for the second quarter of 2021 compared with 7.8% for the second quarter of 2020,” said the company. “Second-quarter 2021 profit per share was $2.56, compared with $0.84 profit per share in the second quarter of 2020.”
Despite its solid financial performance, the company’s stock has been trading in a steady range. The infrastructure bill could trigger a price jump.
Union Pacific (UNP)
This railroad company just keeps chugging along boosting its dividend 10 percent to $1.07 a share in May. That despite supply chain disruptions.
Union Pacific is hauling more raw materials and industrial goods as the economy recovers. That has kept it in the black. The infrastructure bill will increase demand for those materials which will be a boon to the railroad line.
The stock is up five percent this year.
If ETFs are more to your liking, here are some with an infrastructure investment component:
- iShares U.S. Infrastructure ETF (IFRA). Forty-four percent of its holdings are in utilities. It has posted a 20 percent return this year.
- First Trust NASDAQ Clean Edge Smart GRID Infrastructure Index (GRID). This fund targets smart grid and electric energy infrastructure companies.
- Global X U.S. Infrastructure Development ETF (PAVE). This fund scouts for companies that will benefit from U. S. infrastructure activity, such as the production of raw materials, heavy equipment, and construction.
Over one-third of college students have not secured housing and can not afford to rent near campus, according to a Realtor.com survey. Another 19 percent say they are receiving money from their parents to help with housing costs for the first time.
Classes begin in a couple of weeks and students are finding rentals have jumped 8.1 percent since last year.
Questions over whether colleges would resume in-person classes this Fall caused many students to delay their search for a place to live. That delay cost 22 percent of students a place in college housing.
More competition for rental housing
“A lot of college towns have been increasingly attractive to retirees, remote workers, and investors, which have pushed rents higher,” says Realtor.com Senior Economist George Ratiu.
In addition, some families forced to move in with relatives during the pandemic are returning to the rental market, according to the report.
Many students are adjusting their plans to meet the rental challenge. About 21 percent say they will live at home; 13 are adding a roommate and 10 percent say they are settling for lower quality housing.
End of COVID Relief Benefits and What You Can Do
Some of the landmark COVID relief benefits instituted by the federal government have ended and more are going to. Here are your options.
Health Insurance Assistance
This program comes to an end on Sept. 30, so you have time to prepare. If you are on COBRA when premium-free coverage ends, you can switch to and an Affordable Care Act (ACA) police.
In addition, you can qualify for a premium-free ACA policy through the end of the year if you were unemployed any time during 2021.
Federal Unemployment Bonus
This program ends on Sept. 6. That means recipients will get $300 less in benefits. Twenty-six states have already ended the program.
Some states that ended the $300 bonus are facing lawsuits. Florida, Texas, Tennessee, Indiana, Arkansas, and Maryland are being sued by unemployed residents.
Meanwhile, the IRS is issuing refund checks to people taxed on 2020 unemployment benefits.
Some states are continuing the $300 payment beyond the September cutoff and offering cash incentives for finding and keeping a new job.
The pause on student loan payments was extended Friday afternoon to Jan. 31, 2021. It had been set to expire on Sept. 30.
“The payment pause has been a lifeline that allowed millions of Americans to focus on their families, health, and finances instead of student loans during the national emergency,” said U.S. Secretary of Education Miguel Cardona.
The moratorium on federally backed home mortgages ended July 31. Homeowners impacted by this need to act quickly. The lenders do not want your home. If you are proactive and flexible, you may be able to get your mortgage modified to fit your finances. Contact your lender as soon as possible to see what can be done.
The ban on evictions ended July 31. However, President Biden extended the ban last Tuesday. The extension runs to October 3. The ban could be extended again. However, it’s a good idea to seek help now in case that doesn’t happen.
There is $45 billion in renter assistance available from the federal government. You could get help on back and current payments in this program for up to 18 months. Only about $3 billion of that money has been spent.
You may also find help from or local government. The National Low Income Housing Coalition has established a list of programs to help renters in each state.
There are many infrastructure investments opportunities available that can benefit investors for a long time. Hopefully, the jobs those opportunities will create can help other Americans still reeling from the impact of COVID.