President Donald Trump made improved infrastructure a hallmark of his campaign. Now, it's taking the lead in his tenure as Commander in Chief.
The 53-page document released Monday offered more details on the highly anticipated plan from the Trump administration. It calls for at least $1.5 trillion in new investment, increased focus on rural projects, improved training for workers and project times shortened to two years.
New details Monday also included expanded use of tax-exempt debt, allowing states to add tolls on interstates and eased lease standards for airports and other public assets, among a number of other proposals.
The biggest winners under an infrastructure overhaul are the companies that "provide the rocks, the ready-made cement," said Stanley Elliott, lead analyst at Stifel covering machinery, construction equipment and materials. It's "the blocks" of the construction industry that will experience the most meaningful windfalls under a focus on infrastructure.
For both of those firms, business is split 50/50 between public and private projects. But the public projects that would take center stage under a new infrastructure plan are especially lucrative given their long list of demands.
"Highways are some of the most aggregate extensive projects out there," Elliott said. The expansive nature of building a highway far outpaces the bottom-line revenue of building a single-family home, Elliott explained.
Also set to get a boost from renewed focus on infrastructure is United Rentals Inc. (URI) , Elliott said. United Rentals is the largest equipment rental company in the world with a market share double that of its next competitor.
"The rental industry will continue to have legs" as infrastructure projects grow, Elliott noted.
It's worth nothing that the version of the infrastructure plan proposed by Trump may not pass as written in Congress. It might end up a hard sell to Democrats citing its shortfalls and Republicans citing its major spending increase.
"We're hearing mixed things about Congress' appeal to push through this bill," Elliott said, but the measure does appear to be "open for negotiation."
Regardless, construction companies responded largely positively to the bill's details Monday. United Rentals stock rallied 1.89% and Vulcan stock pushed higher 2.45%. Martin Marietta shares were lower 0.34%. The PowerShares Dynamic Building & Construction ETF (PKB) gained 1.71%.