It’s hard to know how much of the incoming Trump Administration’s proposed infrastructure spending will actually take place. Fiscal conservatives in Congress, who also want to lower taxes, may not wish to spend so heavily, which would push the nation even further in debt.
But if infrastructure spending does occur as so many people believe it will, the bigger question is whether the companies that will benefit are worth owning. Many companies that would stand to profit from big construction projects have already been bid up in price to reflect their anticipated prosperity.
A Long-Term Investment?
In addition to whether infrastructure-related stocks are currently worth buying from a valuation point of view, dividend-oriented investors have to ask themselves whether investing in those stocks makes sense from a yield perspective as well as from a long-term point of view.