4 Top Infrastructure Stocks to Buy in September

The U.S. House of Representatives is expected to vote on the $1 trillion infrastructure bill no later than September 27. The Senate passed the bipartisan infrastructure bill on August 10 in a historic 69 to 30 vote.

The bill, which plays a crucial role in U.S. President Joe Biden’s ‘Build Back Better’ plan, includes roughly $73 billion for the electric grid and power infrastructure and $11 billion for road safety. Moreover, the infrastructure sector is expected to grow with the reopening of the economy, as roads, bridges, and electricity systems need regular maintenance and development.

Given this backdrop, it could be wise to bet on fundamentally strong infrastructure stocks Westlake Chemical Corporation (WLK), Lincoln Electric Holdings, Inc. (LECO), Ryerson Holding Corporation (RYI), and Insteel Industries, Inc. (IIIN). They are expected to keep rallying in the upcoming months based on their financial strength and solid growth prospects.

Westlake Chemical Corporation (WLK)

Global manufacturer and marketer of basic chemicals, vinyl, polymers, and building products, WLK functions through two segments: Vinyl; and Olefins. While its Vinyl segment’s offerings include specialty and commodity polyvinyl chloride (PVC) and caustic soda, its Olefins segment offers polyethylene and hydrogen products, among other products.

North American Pipe Corporation (NAPCO), a WLK subsidiary, acquired LASCO Fittings LLC last month. This is expected to help the company expand its reach in additional markets as LASCO specializes in half-inch to four-inch fittings and serves the plumbing, pool, spa, industrial, irrigation, and retail markets in the U.S.

WLK’s net revenue increased 67.3% year-over-year to $2.86 billion in the second quarter ended June 30, 2021. Its income from operations came in at $720 million, up 1,900% year-over-year. While its net income increased 3,380% year-over-year to $522 million, its EPS came in at $4.04, up 3,572.7% year-over-year.

Analysts expect WLK’s revenue and EPS to increase 39.4% and 439.6% year-over-year to $10.46 billion and $12.25, respectively, in fiscal 2021. In addition, it has surpassed the consensus EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 38.2% to close yesterday’s trading session at $86.80.

WLK’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which indicates a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its prior year weighting.

WLK has a B grade for Value, Growth, and Sentiment. Within the A-rated Chemicals industry, it is ranked #9 of 95 stocks. Click here to see the additional POWR Ratings for Momentum, Stability, and Quality for WLK.

Lincoln Electric Holdings, Inc. (LECO)

LECO is a manufacturer of welding, cutting, and brazing products, with a presence across 18 countries. It operates in three segments: Americas Welding, International Welding, and The Harris Products Group. In addition, its products include arc welding power sources, plasma cutters, wire feeding systems, and robotic welding packages.

On July 28, 2021, LECO announced that it had completed the acquisition of Overstreet-Hughes Company, Inc. and Shoals Tubular, Inc. LECO’s Chairman, President, and CEO, Christopher L. Mapes, said, “Our combined portfolio now offers HVAC OEMs with the broadest portfolio of solutions and application expertise for high-quality and efficient HVAC coil fabrication.”

LECO’s total revenues increased 39.9% year-over-year to $826.45 million for the second quarter ended June 30, 2021. Its operating income increased 206.4% year-over-year to $121.82 million. Also, its net income increased 256% year-over-year to $96.11 million, while its EPS came in at $1.60, representing a 255.6% year-over-year rise.

For fiscal 2021, LECO’s revenue and EPS are expected to grow 20.9% and 48% year-over-year to $3.21 billion and $6.14, respectively. In addition, it surpassed the consensus EPS estimates in all of the trailing four quarters. Over the past nine months, the stock has gained 13.4% to close yesterday’s trading session at $134.06.

It’s no surprise that LECO has an overall A rating, which equates to a Strong Buy in our POWR Rating system. In addition, it has a B grade for Stability and Quality.

LECO is ranked #3 of 83 stocks in the A-rated Industrial - Machinery industry. Click here to see the additional POWR Ratings for LECO (Growth, Value, Sentiment, and Momentum).

Ryerson Holding Corporation (RYI)

One of the leading value-added processors and distributors of industrial metals, RYI operates across the United States, Canada, Mexico, and China. The company offers carbon steel, stainless steel, alloy steels, aluminum, nickel, and red metals. Also, it serves various industries, including industrial machinery and equipment manufacturing, HVAC manufacturing, and construction equipment manufacturing.

On September 7, 2021, RYI acquired Specialty Metals Processing, a toll processor engaged in processing stainless steel, aluminum, titanium, and nickel alloy products. This is expected to help expand the company’s stainless products portfolio.

RYI’s total revenues increased 83.9% year-over-year to $1.42 billion in the second quarter ended June 30, 2021. It shipped 559,000 tons in total, representing a 21% year-over-year rise. Its operating profit came in at $166.10 million compared to a loss of $10.60 million in the year-ago period, while its net income came in at $112.90 million compared to a loss of $25.60 million in the year-ago period. Also, its EPS came in at $2.91 compared to a loss per share of $0.67 in the prior year's quarter.

RYI’s revenue and EPS are expected to grow 58.7% and 6,037.5% year-over-year to $5.50 billion and $4.75, respectively, in fiscal 2021. Over the past nine months, the stock has gained 99.8% to close yesterday’s trading session at $24.70

RYI’s POWR ratings reflect this promising outlook. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system. In addition, it has an A grade for Growth and Momentum, and a B grade for Value, Sentiment, and Quality.

RYI is ranked #1 of 38 stocks in the Industrial - Metals industry. Click here to see RYI’s rating for Stability as well.

Insteel Industries, Inc. (IIIN)

IIIN is one of the largest manufacturers of steel wire reinforcing products used for concrete construction applications. The company’s concrete reinforcing products consist of two product lines: prestressed concrete strand (PC strand) and welded wire reinforcement (WWR) products.

H.O. Woltz III, IIIN’s President, and CEO said on July 22, “The swift rebound in widely monitored non-residential construction market leading indicators to almost record levels together with consistent levels of public construction spending give us confidence that demand will remain robust into 2022.”

IIIN’s revenue increased 31.8% year-over-year to $160.74 million for the fiscal third quarter ended July 3, 2021. The company’s gross profit came in at $31.55 million, up 113.1% year-over-year. Its net income increased 176% year-over-year to $18.40 million. Also, its EPS increased 176.5% from the same period last year to $0.94.

Analysts expect IIIN’s revenue to be $589.96 million in fiscal 2021, representing a 24.8% year-over-year rise. In addition, the company’s EPS is expected to increase 188.7% year-over-year to $3.06 in the current year. Also, it surpassed Street EPS estimates in each of the trailing four quarters. Over the past nine months, the stock has gained 46.5% to close yesterday’s trading session at $35.28.

IIIN’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which indicates a Strong Buy in our proprietary rating system.

In addition, IIIN has a B grade for Growth, Value, Sentiment, and Quality. Within the A-rated Steel industry, it is ranked #9 of 33 stocks. Also, click here to see the additional POWR Ratings for Stability and Momentum for IIIN.

WLK shares were trading at $84.96 per share on Wednesday afternoon, down $1.84 (-2.12%). Year-to-date, WLK has gained 5.11%, versus a 21.42% rise in the benchmark S&P 500 index during the same period.

Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.

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