There has always been a strong interest in infrastructure assets on the ASX, with most company’s in the asset class delivering stable yields, good diversification benefits and liquidity. These 3 stocks look poised to capitalise on Australia’s strong infrastructure environment at present and book decent return for shareholders in the near future. Brickworks Limited (ASX: BKW) Diversified clay and concrete company Brickworks Limited closed down 2.5% to $15.44 to finish off last week’s trade, but its 12-month share chart has been much more favourable, with prices on a steady climb from mid-2017 lows of around $13 to $15.20 at the…
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There has always been a strong interest in infrastructure assets on the ASX, with most company’s in the asset class delivering stable yields, good diversification benefits and liquidity.
These 3 stocks look poised to capitalise on Australia’s strong infrastructure environment at present and book decent return for shareholders in the near future.
Brickworks Limited (ASX: BKW)
Diversified clay and concrete company Brickworks Limited closed down 2.5% to $15.44 to finish off last week’s trade, but its 12-month share chart has been much more favourable, with prices on a steady climb from mid-2017 lows of around $13 to $15.20 at the time of writing.
Brickworks has benefited from local infrastructure spending in recent times as the Australia and New Zealand building cycle remains strong, and the company has solid fundamentals, with half-year figures for the 6-months to January 31, 2018 including a 4% rise in NPAT to $115.6 million, a revenue lift of 7% and an interim dividend rise of 5.9% to 18c per share.
Brickworks also boasts unique diversification in its asset base, with a significant shareholding in Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) seen as positive for many investors.
With housing commencements in Australia at elevated levels the short to medium-term future looks bright for Brickworks, with residential building in Victoria particularly strong and conditions in Queensland and New South Wales reliable as usual.
Transurban Group (ASX: TCL)
Shares in urban toll road network player Transurban Group opened up today to $11.19 as wealth management advisory firm Ord Minnett last week labelled the stock as a buy after it reached an agreement to acquire 100% of equity interest in the A25 toll road in Montreal, Canada.
The $843 million investment should assist Transurban to leverage existing assets in North America and is aligned with the company’s overall strategy of targeting heavily-congested urban areas with strong demographics.
It’s this proactive approach by Transurban that is likely to hold the company in good stead going forward with a demonstrated history of market-led negotiations and a focus on improving customer experience flowing into operational success.
Big things are expected from the $24.85 billion market cap company going forward and although the last 12-months of share pricing has been volatile for the stock, things are likely on the improve as its momentum builds globally.
Sydney Airport Holdings Pty Ltd (ASX: SYD)
Shares in Sydney Airport owner Sydney Airport Holdings Pty Ltd have suffered through a downtrend in the last 12-months, with a volatile share price chart to land at a price of $6.53 at the time of writing.
But Sydney Airport Holdings has made moves lately to leverage on its status as the most prominent Australian airport by refinancing debt and take the pressure off the company’s bottom line over the next 3 years as the company focuses on steadily increasing south-east Asian passenger numbers.
High levels of debt remain a risk factor for the stock if interest rates creep up – Sydney Airport Holdings has $8 billion in net debt – but with increasing arrival numbers forecast for the foreseeable future it’s unlikely the company will see too much of a dip in earnings.
If you’ve bought in at the current low, things should only improve from here with Goldman Sachs slapping a buy rating on the stock in February given its lower sensitivity to bond rate movements, stronger growth outlook in operating earnings, and better ﬂexibility on distributable cash ﬂows.
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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Sydney Airport Holdings Limited and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Brickworks and Transurban Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.