The residential and nonresidential construction sector has experienced significant growth in recent months, benefiting companies such as Caterpillar, Terex, and Manitowoc. While the economic recovery in China may pose some challenges to construction activity, analysts anticipate infrastructure stimulus in the third quarter that could drive economic growth. Caterpillar offers a stable dividend yield and a track record of consistent dividend increases, while Terex and Manitowoc are both approaching buy points as they emerge from price consolidations.
Key Points
1. Residential and nonresidential construction increases have positively impacted Caterpillar, Terex, and Manitowoc stocks in June, leading to potential buy opportunities for investors.
2. While a slower economic recovery in China may pose challenges to construction activity, analysts expect infrastructure stimulus in China’s third quarter to drive economic growth, benefiting the heavy equipment makers.
3. Caterpillar offers a 2.22% dividend yield and a track record of dividend increases, making it an attractive option for income-focused investors. Terex and Manitowoc also show promising earnings growth and stock consolidation patterns that could lead to potential gains.
Residential and nonresidential construction increased in June, providing a boost to the stocks of heavy-equipment makers Caterpillar, Terex, and Manitowoc. These companies have been working their way out of price consolidations that started in March. The construction industry is experiencing growth globally, with a particular emphasis on federal infrastructure projects in the United States.
For example, the U.S. Department of the Interior recently allocated $585 million from the Infrastructure Investment and Jobs Act to fund 83 projects in 11 states. This increased spending on heavy equipment as repairs and upgrades are being made to dams and other water-related sites in drought-stricken areas.
While residential construction is picking up, nonresidential construction in the U.S. is also on the rise. According to data from the U.S. Commerce Department, there is an increase in activity in this sector as well. However, a potential challenge to construction activity arises from China’s slow economic recovery. Construction activity in China is slowing down, which has put pressure on steel markets. Despite this, analysts remain optimistic that the Chinese government will implement infrastructure stimulus in the third quarter to boost economic growth.
Caterpillar, Terex, and Manitowoc are all showing positive signs in terms of sales and earnings growth. Caterpillar has seen a 13.69% increase in June, with both sales and earnings growing at double-digit rates. Moreover, Caterpillar offers a dividend yield of 2.22% and has a history of increasing its dividends. Terex, a smaller company with a market capitalization of $3.753 billion, is consolidating below a previous high point and may be forming a handle buy point. Analysts expect Terex’s earnings to increase by 39% this year. Manitowoc, a small-cap company with a market capitalization of $613.2 million, is forming a double-bottom pattern and may have a buying opportunity above $18.46. Manitowoc has experienced revenue growth in seven of the past eight quarters and has seen an acceleration in earnings growth in the past two quarters.
Although Caterpillar, Terex, and Manitowoc are promising investment options, it is also worth considering other stocks.
Additionally, it is important to consider the investment opportunities presented by other emerging technologies such as Meta, Roblox, and Unity. Before making investment decisions, it is crucial to thoroughly research and understand these companies’ market trends and performance.
