What happened

Shares of leading cement manufacturer U.S. Concrete (NASDAQ:USCR) rose over 16% in June without any company-specific news. However, at the beginning of the month, the American Society of Civil Engineers released it's 2017 Infrastructure Report Card, a report that's published every four years and describes the state of various types of American infrastructure, from roads to airports to water distribution systems.

This year Uncle Sam earned an overall letter grade of D+. That's pretty bad, but it's actually tied for his highest mark ever and identical to the letter grade received in the last report, published in 2013. This time may be different, however, as there is broad political support for spending up to $1 trillion on modernizing American infrastructure. That nothing has been officially proposed in Washington hasn't stopped investors from looking ahead or dreaming big.

A stock chart showing an increase.

Image source: Getty Images.

So what

The highlights from the report aren't very flattering for American infrastructure, but Wall Street sees that as good news for infrastructure stocks such as U.S. Concrete: 

  • The United States needs to spend an estimated $4.59 trillion to upgrade all parts of its infrastructure.
  • While some of the required funding is already penciled into public and private budgets, there's an estimated $2 trillion investment gap.
  • Just four of 16 infrastructure categories -- ports (C+), solid waste (C+), bridges (C+), and rail (B) -- earned a letter grade higher than a D+.

In 2009, the investment requirement was just $2.2 trillion, which highlights just how badly the nation has neglected its infrastructure for the past decade. Of course, there's growing optimism that the Trump administration can corral support on both sides of the political aisle for a $1 trillion investment fund. That would cut the estimated investment gap in half.

That hasn't been lost on U.S. Concrete or its shareholders. An investor presentation released on June 1 specifically stated that the company expects the Trump administration's regulatory and tax agendas to extend the current construction cycle, thereby resulting in continued growth for the company.

USCR Chart

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An extension of growth could be awesome for investors, especially considering that the cement manufacturer hasn't wasted any time growing in the current cycle. Numerous acquisitions in key metropolitan areas -- New York City, San Francisco, and Dallas/Fort Worth -- have allowed it to grow revenue, operating income, and cash flow by 95%, 235%, and 367%, respectively, since 2013. 

It's one of the few companies with the size and scope to consistently tackle big projects in each area, including the Golden State Warriors' new arena, the World Trade Center complex, La Guardia airport upgrades, and a host of data centers and global campuses for the largest tech companies. Since projects are bid on and awarded years in advance, any regulatory boost really can lead to years of relatively stable and predictable growth.

Now what

It's important to note that policy progress in Washington has been stifled by polarization, and that no infrastructure spending plan has yet to be formally unveiled or debated in Congress. So although broad support for such a measure has investors dreaming of what could be, more realistic victories for infrastructure stocks such as U.S. Concrete may come in the form of regulatory and tax overhauls that don't require congressional approval. Those may not come with $1 trillion attached, but they can still go a long way for securing growth for the industry -- and tackling the infrastructure investment gap.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.