President Trump's campaign talk of a $1.5 trillion infrastructure plan was inevitably drowned out by other rhetoric including a failed attempt to get rid of Obamacare and a bold mission to prioritize tougher immigration and more protectionist trade policies. Now, however, with Congress split after the mid-term elections, the White House may agree on a major building plan to keep the U.S. economy expanding during a period of heightened market volatility. Bipartisan support of such a bill could boost the shares of infrastructure companies including Martin Marietta Materials (MLM), Aecom (ACM), Nucor (NUE) and Caterpillar (CAT), as well as the iShares U.S. Infrastructure ETF (IFRA), according to a column in MarketWatch. 

Stimulus Package Becomes More Likely

A Democratic-controlled House and a Republican-led Senate increases the chances for an infrastructure spending to prevail, given it remains a rare “goldilock” issue viewed as neither too left or right. Further, the current administration will want to do all that it can to boost the economy before the presidential race in 2020. Meanwhile, a severe and overdue need to improve America’s infrastructure is a key driver for a sweeping spending bill, considering that the American Society of Civil Engineers gave the U.S. a D+ in its last annual infrastructure report card.

Now that several forces are at work to push through an infrastructure plan, a few beaten down stocks that generate revenues from government spending could present outsized returns for investors willing to buy before a potential stimulus measure is unveiled.

Caterpillar Oversold

Caterpillar shares have been battered due to heightened trade tensions, though the stock could still serve as a value play regardless of an infrastructure bill, per MarketWatch columnist Jeff Reeves. The firm’s strong operating margins, brand strength, $1.25 billion stock buyback announced in July, reduced capital expenditure and healthy 2.52% dividend yield make it a bargain play, with the stock trading at just 10 times forward price to earnings.

Shares of the heavy machinery company stand at 14.27% YTD, hitting a 52-week high/low of $165.78/$87.50, with weaker-than-expected Q2 results. 

Growth-Play Martin Marietta 

Martin Marietta Materials, an aggregates and building materials supplier, sells products that are required for bridge and road projects. MarketWatch notes that while the benefits of a stimulus package are clear for the Raleigh, NC-based company, other factors including the launch of its largest-ever aggregates project in Texas this year, projected revenue growth of 10% in fiscal 2018 and 2019. Favorable pricing and strong shipping trends, regardless of potential legislative tailwinds, could help spark a turnaround. Shares of Martin Marietta are down 7.39% YTD.

All four of these stocks have plunged into bear market, meaning that any boost in federal spending could provide them with a jump start.