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Tickers in this Article: GVA, ACM, URS, GE, SI, HON, STLD
The election cycle is in full swing and with a lagging economy looming large as an issue, President Obama has come out with his own package of proposals to get the economy and job numbers moving in a more favorable direction. One of the centerpieces of the program is another boost in infrastructure spending.

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Assuming that the President can get this package through Congress more or less intact (and that is no guarantee), it is worth considering the investment consequences. If billions and billions of dollars work their way through to roads, transit systems and other public works projects, can infrastructure stocks finally get moving in a more positive direction?

The Size of the Bid
Although the details will almost certainly change as bills are debated and amended, President Obama proposed as much as $140 billion in infrastructure spending, with possibly $50 billion being put on a so-called "fast track." The reasons to do this are pretty familiar - the projects themselves will put people to work (both in construction and related industries like steel and concrete) and better infrastructure has typically correlated with improved economic performance.

Before rushing to buy General Electric (NYSE:GE) or looking to see if Kiewit is still private (it is), investors may wonder why this plan will work when the prior infrastructure stimulus of nearly $106 billion didn't seem to help much. It is partially true that this spending didn't deliver the hoped-for jobs and economic activity. What seems to have happened, though, is that states dramatically cut back on their spending to address their own budget gaps and the job situation could have been even worse absent stimulus that is now considered "ineffectual" in hindsight.

The New Plan
As part of the new plan, monies would be targeted towards a variety of projects including highways, bridges, mass transit systems and air traffic control systems.

If that actually happens, investors should take a look at names like Granite Construction (NYSE:GVA), one of the largest publicly-traded pure plays on civil engineering and a builder of roads, dams, bridges, airports and so on. Likewise, while URS (NYSE:URS) and AECOM (NYSE:ACM) do have businesses outside of civil engineering (including a large military business at URS), they are large public contractors nonetheless.

Interestingly, a lot of other engineering and construction names have diversified away from civil engineering and may not see as much of an uptick from this plan. Companies like Fluor (NYSE:FLR) and Jacobs (NYSE:JEC), for instance, have done well by diversifying into energy and petrochemical markets and many contractors likewise have sizable utility businesses that are not growing so well at present.

Second Derivative Ideas
It seems straightforward that if there's going to be a spate of road-building and bridge-building, companies like Granite and Kiewit are going to get a chunk of that business. It is also worth remembering, though, that they don't build out of nothing. Bridges and roads are going to require steel - steel that will come from mills owned by companies like Nucor (NYSE:NUE) and Steel Dynamics (Nasdaq:STLD). Likewise, concrete will be needed from companies like Cemex (NYSE:CX) and machinery from Caterpillar (NYSE:CAT) and Ingersoll Rand (NYSE:IR).

Thinking further, a sustained bout of infrastructure improvement will pay dividends for companies like General Electric, Siemens (NYSE:SI), Honeywell (NYSE:HON) and Boeing (NYSE:BA) - companies that sell equipment and systems for mass transit and/or air traffic control.

The Bottom Line
Even if the current administration can get its latest stimulus bill into law, the overall economy is still going to be the stronger force in a head-to-head competition. Certainly an increase in public works projects will help companies like Granite and Steel Dynamics, but many of the names in this article have as much to lose (or more) from a general worsening of economic confidence as they do to gain from a one-time scheme to improve the infrastructure of the United States. (For additional reading, take a look at Build Your Portfolio With Infrastructure Investments.)

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