Climbing a 'Wall of Worry' and Catching a 'Wave of Wealth' with Stocks

The president called for $50 billion in spending on rebuilding bridges, repairing old highways and building rail lines, and would pay for that by seeking once again funds previously requested yet never approved by Congress.

To financially supplement whatever the government spends on infrastructure, he suggested public and private partnerships for projects important to businesses such as power grids and energy pipelines, a plan that implies relying on private funding rather than taxpayer dollars.

All this is why companies like Polaris Industries (PII) which manufactures and sells motorcycles, off-road vehicles, snowmobiles, and on-road vehicles primarily in the U.S., Canada and Europe is optimistic.

The Medina, Minn.-based company plans to double its investment spending to roughly $200 million this year on top of a 22% increase last year. Polaris is proactive and it's building a new factory to produce off-road vehicles in Europe... that's right... Europe, where in spite of all the bad press last year it saw sales increase to the point that this region of the world accounts for 10% of PII's revenues.

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The 5-year chart below shows "the long and winding road" Polaris has been on that has led them to also be able to expand factories in the U.S. and south of the border in old Mexico. The price trajectory looks like it should be accompanied by the song "Climb Every Mountain" as does the quarterly revenue per share growth. PII data by YCharts

PII pays a $1.68-per-share dividend at a sustainable payout ratio of 38%. It has total cash (most recent quarter) of more than $417 million and operating cash flow (trailing 12 months) of more than $416 million. Polaris' trailing 12 months return on assets is more than 22% and its return on equity is a thrilling 52.46%.

Another company planning on some huge increases in spending is General Dynamics (GD) which is currently selling around $66-a-share, more than 11% below its 52-week highs.

GD is an aerospace and defense company, providing business aviation, combat vehicles, weapons systems, munitions for the military and commercial shipbuilding. It also creates communications and information technology products and services worldwide. Some investors have been afraid to invest in GD even though it pays a current dividend yield-to-price of nearly 3.1%. Looking at its key financial numbers I took note that in the most recent quarter it has a manageable debt load with total cash of $3.3 billion dollars, operating cash flow (trailing 12 months) of $2.68 billion and levered free cash flow (trailing 12 months) of $2.87 billion.

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