As the economy continues to stumble, all hands are on deck to keep it from sinking completely. In addition to numerous federal bailouts and an in-the-works plan to help the housing industry, there's President-elect Obama's scheme to create 2.5 million new jobs through the creation of a massive infrastructure program.
I frankly don't know whether the Obama plan can bear fruit fast enough to have a meaningful effect on our nation's economic health. But what I do notice as I consider the proposal is a number of solid companies that stand to benefit meaningfully should the plan get the go-ahead.
The first name that pops into my mind in this connection is Cemex (NYSE: CX), the giant Mexico-based global cement producer. Lately, the company's been hobbled by its outsized debt. However, through its acquisition of Rinker Materials last year and its purchase of Southdown back in 2000, Cemex is well represented in the U.S. -- especially in Florida. And I wouldn't turn up my nose at a stock that's more than a double in the past month. So if you're willing to be patient, Cemex could add nicely to your portfolio's profitability over time.
Find concrete opportunities
There's a trio of smaller companies, however, that stand to benefit more quickly from an infrastructure program. Let's take a brief look at each member of this threesome:
The first name up is Texas Industries (NYSE: TXI), a Dallas-based producer of cement -- through plants in Texas and California, the two states with the most voracious appetites for the material. The company also produces aggregates, ready mix, and packaged concrete in Arkansas, Louisiana, Oklahoma, and Texas. Indeed, the company is the largest low-cost producer of cement in Texas, and once a plant upgrade has been completed in California, it will be the second-largest such producer there as well.
You won't get rich on Texas Industries' dividend, which currently yields less than 1%. But the company's share price is up over 30% in just the last month. And with yesterday's closing price still less than half the company's 52-week high, "pricey" isn't yet a term I'd apply in this case.
Hit the road
Second, there's Chattanooga-based Astec Industries (Nasdaq: ASTE), the nation's leading manufacturer of equipment used in the asphalting of roads, trenching for pipelines and utilities, and aggregates processing. Astec is up over 40% since mid-November.
In a tough credit environment, Astec has the debt-free balance sheet you want to see, along with the flexibility it provides to management as attractive growth opportunities become available to the company. It'd be nice if the company paid a dividend, but as long as the stock provides gains, investors should stay interested.
Fly like an Eagle
The final member of the trio is somewhat riskier than the other two. Eagle Materials (NYSE: EXP) is a Dallas neighbor of Texas Industries and an offspring of homebuilder Centex (NYSE: CTX). In today's market, Eagle comes with good news and bad news. On the positive side, the company operates four cement plants, as well as ready mix and aggregates operations that position it to handle any infrastructure efforts the President-elect establishes.
On the other side of the ledger, however, Eagle is a major producer of gypsum wallboard, which is used -- yup, you guessed it -- largely in homebuilding. And while the company's share price hasn't climbed much in the last month, it's up a modest 8%. And when housing turns -- and it will, eventually -- Eagle should enjoy dual benefits from its cement-related and gypsum wallboard operations.
There are other mid-cap companies you may consider that stand to see more business from a federal infrastructure program. For instance, there's North Carolina aggregates producer Martin Marietta Materials (NYSE: MLM) and aggregates and cement manufacturer Vulcan Materials (NYSE: VMC), which have both seen significant gains since mid-November.
The key is that these stocks are generally heading in a direction that runs counter to the market as a whole. For my money, they deserve your attention and perhaps even some of your investment shekels.
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