Infrastructure may not be a "sexy" sector to invest in, like technology or cannabis stocks. But the best infrastructure stocks can still be great for your portfolio...maybe even better than investments in other "hotter" sectors.

With that in mind, we asked three of our Motley Fool contributors what infrastructure stocks they think investors should have on their watch lists right now. They came back with Nucor (NUE -1.91%)NextDecade (NEXT 1.57%), and Hannon Armstrong Sustainable Infrastructure Capital (HASI 0.89%). Here's why they think these stocks are worth keeping an eye on. 

A number of pipelines of different sizes

Top infrastructure stocks may sound boring, but they can help your portfolio outperform. Image source: Getty Images.

Steel is still good business

Rich Smith (Nucor): It's been only a few weeks since I made Nucor steel my pick for an infrastructure stock to watch in July. Unfortunately, most of what we've done since is watch the stock go down.

From July 23, when I picked it, to today, Nucor stock has in fact gone down a whopping 5%, losing nearly $1 billion of its market cap along the way. So is it time to throw in the towel and declare this stock a dud?

Hardly. If you ask me, we need to give this idea more time to play out.

While it's true that, with $888 million in net profit earned in the year's first half, Nucor's profits are down nearly 15% from this point in time last year, that only stands to reason. According to Steel Market Update data, hot-rolled steel prices have been falling this year, and bottomed out only at the end of that quarter at $520 per ton.  

Since then, however, Nucor has announced two separate $40 price hikes on its product. (Yes, Nucor raised prices again after I recommended it.) And those prices appear to be sticking. By mid-July, HRC was up to near $560 again, and the most recent price I've seen quoted is $597 per ton.  

Conclusion: Even in the face of a continuing trade war with China, and despite the lifting of tariffs on Mexican and Canadian steel, steel prices are marching higher again, and that's good news for Nucor.

Despite this, the stock is still selling for a cheap valuation of only 7.2 times trailing earnings, with an 8.5% projected earnings growth rate and a 3.2% dividend yield. Assuming July's price hikes hold, profits should follow, and that makes now seem (to me) a fine time to buy Nucor stock.

Hurry up and wait

John Bromels (NextDecade): I'm recommending NextDecade, a liquefied natural gas up-and-comer, as a stock to watch because it's in a unique situation right now. There's a big question mark surrounding NextDecade's future, which could make or break the thesis for buying the stock. Once that question gets cleared up, investors should be ready to pounce...or walk away. 

Like a lot of other energy companies, NextDecade is hoping to capitalize on the natural gas boom in the U.S. Unlike a lot of other companies, NextDecade is betting big on LNG exports to drive its growth. The company is currently gearing up to start work on a pipeline and export-terminal project called Rio Bravo that will bring natural gas from the Permian Basin in West Texas to the Gulf Coast in South Texas. The pipeline has a proposed capacity of 4.5 billion cubic feet per day, which could generate as much as $4 billion in EBITDA each year.

The Rio Bravo project has cleared most of its regulatory hurdles, with one remaining: The Federal Energy Regulatory Commission (FERC) has yet to announce a federal authorization decision. That is likely to come soon, and with Republicans holding a 2-1 advantage on the commission, that decision seems likely to be positive. The same two Republican commissioners voted to approve another LNG export terminal in February.

Of course, until the vote is final, there's no guarantee. Likewise, even if the approval is granted, NextDecade will still have to make its own final investment decision, then finance and build the project before it can come on line and start generating revenue. That's not scheduled to happen until 2023.

That extended timeline offers a lot of opportunities for the company's plans to get derailed, which is why I'm not necessarily recommending you buy NextDecade now (although, if you can stomach the risk, the price is probably lower now than it will be after a potential positive FERC decision). But if you're interested in infrastructure stocks, you'll at least want to keep NextDecade on your watch list.

A hidden energy dividend

Travis Hoium (Hannon Armstrong): Most renewable-energy yieldcos today are investing in solar or wind projects that generate revenue by selling electricity to utilities, companies, or individuals under long-term power purchase agreements. But that's not the only value in renewable energy today. 

Hannon Armstrong is making innovative investments in assets like the land under solar farms, preferred equity in wind projects, and efficiency investments made by government institutions. The company aims to generate excess cash flow that it can pay out as a dividend, just like any yieldco. But it has the flexibility to invest in multiple asset classes in the industry, and that's arguably its biggest advantage. 

Given the assets it invests in, usually taking a lower-risk role in the capital stack than buying an equity position, Hannon Armstrong's management expects 2% to 6% core EPS growth through at least 2020. Given the current 4.9% dividend yield, just maintaining the dividend over a long period of time would be a good investment, but the payout should grow over time. 

What I like is that Hannon Armstrong is investing in an industry that's growing, and companies, governments, and individuals will need capital to make energy upgrades. That's where the company can step in and provide a valuable financial service, which is why this is a dividend stock that's worth owning long term.