America’s $2 Trillion Infrastructure Plan Is Picking Up Speed, And These 17 Companies Are Along For The Ride

America’s $2 Trillion Infrastructure Plan Is Picking Up Speed, And These 17 Companies Are Along For The Ride
Reda Farran, CFA

almost 3 years ago3 mins

Mentioned in story

What’s going on here?

If passed by his Democratic Party-controlled Congress, US president Joe Biden’s $2 trillion-plus infrastructure spending plan will unleash $750 billion worth of spending on the energy sector alone. Happily for investors, many of the companies in line to benefit have publicly listed shares – but not all of the potential winners are obvious. Here are a few stock and exchange-traded fund (ETF) picks sitting in particularly juicy-looking parts of the energy sector.

Renewable energy

Biden’s initiative includes a 10-year extension to tax subsidies that have been a boon to wind, solar, and other renewable energy projects. That would massively benefit renewables project developers, and two of the biggest are NextEra Energy (ticker: NEE) and Avangrid (AGR). The charts below rank the largest renewable companies based on the amount of wind and solar energy capacity they own in the US.

Top 10 US wind firms
Top 10 US solar firms

A renewable energy boom would also provide a boost to businesses manufacturing wind turbines and solar panels. Major companies involved in this space include Vestas Wind Systems (VWS), General Electric (GE), JinkoSolar (JKS), and First Solar (FSLR).

Two good options for picking up broader investment exposure to the wind and solar sectors, meanwhile, are the First Trust Global Wind Energy ETF (FAN) and the Invesco Solar ETF (TAN).

Electric vehicle (EV) charging

The infrastructure package earmarks $174 billion for an acceleration in America’s shift toward EVs, with plans to construct half a million EV charging stations supported by grants to local government and the private sector.

Prominent companies already building and operating such stations include Blink Charging (BLNK) and ChargePoint (CHPT). Two further firms are currently on their way to becoming public via “reverse mergers” with special-purpose acquisition companies: EVgo and EVBox. Swiss-Swedish industrial giant ABB (ABBN), meanwhile, is a major manufacturer of EV charger components.

Battery storage

Biden’s infrastructure bill also proposes to introduce new tax breaks for the large-scale battery storage projects increasingly needed to help electricity grids cope with wind and solar power’s naturally fluctuating supply.

Among those most heavily involved in either battery production or battery storage project development are CATL (ticker: 300750), Panasonic (6752), LG Chem (051910), Samsung SDI (006400), SK Innovation (096770), and EV manufacturer Tesla (TSLA). You can alternatively gain exposure to a diversified basket of battery-focused stocks through the Global X Lithium & Battery Tech ETF (LIT).

Hydrogen fuel cells

Energy companies are increasingly eyeing hydrogen as a carbon-free fuel source – one that can be converted directly into electricity via fuel cells. And Biden’s infrastructure plan promises more funding for research into its future applications.

Hydrogen fuel cells are currently very pricey, but government-backed projects could help costs come down to a point where the technology is commercially viable. Two public companies making hydrogen fuel cells at the moment are Ballard Power Systems (BLDP) and Bloom Energy (BE).

Why should I care?

If you’re looking for ways to profit from Biden’s $2 trillion infrastructure plan, then the stocks and ETFs mentioned above are a great place to start. Just note that the list includes several non-US companies, though. That’s worth watching out for: it remains to be seen whether the Democratic administration will allow foreign-headquartered firms equal access to federal infrastructure funds.

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Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

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