7 Infrastructure Stocks With Huge Return Potential for Long-Term Investors

Let’s face reality – the concept of infrastructure stocks to buy, no matter how well it’s dressed up is terribly boring. I get it. At the same time, these enterprises quite literally undergird the machinery of the economy. Because you’re buying the rubber meeting the road, such publicly traded companies offer predictability.

Essentially, no matter what’s going on with the world and the economy, construction stocks enjoy permanent relevance. Sure, recessions obviously impact the scale and pace of development. However, unless we’re talking about a truly catastrophic event, nations look forward to building or rebuilding.

To be sure, the maximum potential of the infrastructural industry doesn’t match that of the technology sphere, for example. Nevertheless, you’re likely to enjoy a higher probability of success, even if the magnitude of said success is smaller. If you’re okay with that, these may be the best infrastructure stocks for 2023.

Infrastructure Stocks: Dover (DOV)

An American conglomerate manufacturer of industrial products, Dover (NYSE:DOV) features five business segments: Engineered Products, Clean Energy and Fueling, Imaging & Identification, Pumps & Process Solutions, and Climate and Sustainability Technologies. Commanding a market capitalization of over $20 billion, DOV ranks among the top building materials stocks. Since the beginning of this year, DOV gained 7% of its equity value.

Financially, Dover represents a quiet and steady player. Although the company carries a bit more debt than arguably most investors would like, its Altman Z-Score hits 4.37, implying low bankruptcy risk. Operationally, the company posts a three-year revenue growth rate of 6.9%, beating out 58% of other infrastructure stocks. Also, its net margin comes in at an impressive 12.52%.

Significantly, the market prices DOV at a forward multiple of 16.05. As a discount to projected earnings, Dover ranks better than 60.59% of the competition. Finally, Wall Street analysts peg DOV as a consensus moderate buy. Their average price target is $163.83, implying over 13% upside potential.

Infrastructure Stocks: Comfort Systems (FIX)

Headquartered in Houston, Texas, Comfort Systems (NYSE:FIX) provides heating, ventilation, and air conditioning installation, maintenance, repair, and replacement services within the mechanical services industry. Presently, Comfort carries a market cap of $5.32 billion. Since the Jan. opener, FIX gained an impressive 27% of equity value, making it one of the best infrastructure stocks for 2023 so far.

It’s possible that the company can go even further. First off, Comfort enjoys a decently stable balance sheet. Its Altman Z-Score pings at 4.22, implying fiscal resilience and low bankruptcy risk. Operationally, though, Comfort truly stands out. Mainly, its three-year revenue growth rate stands at 17.7%, outflanking 85.15% of other construction stocks. As well, its three-year free cash flow growth rate comes in at 33.2%, above nearly 78% of its peers.

Notably, the enterprise also commands solid profitability. Its net margin is 5.94%, exceeding 69.16% of sector players. Lastly, D.A. Davidson’s Brent Thielman pegs FIX a buy. The expert’s average price target lands at $170, implying over 14% upside potential.

Infrastructure Stocks: Ametek (AME)

A multinational conglomerate, Ametek (NYSE:AME) is a global designer and manufacturer of electronic instruments and electromechanical devices. Some of the products that Ametek manufactures include electrical motors, pumps, and interconnects. As a quietly relevant enterprise, AME gained over 7% of equity value in the trailing one-year period. However, since the Jan. opener, it slipped more than 2%.

Nevertheless, for those looking for predictable building materials stocks, Ametek presents an intriguing candidate. As with the top two enterprises, Ametek enjoys a decent (though not great) balance sheet. Its Altman Z-Score hits a relatively lofty 5.72, implying broader fiscal stability. Operationally, Ametek distinguishes itself with a 13.3% book growth rate over the past three years.

Most prominently, though, the company gets it done on the bottom line. Its net margin pings at 18.85%, beating out 91.89% of rival infrastructure stocks. To close out, analysts peg AME as a consensus moderate buy. Their average price target stands at $159.60, implying over 16% upside potential.

Nordson (NDSN)

An American multinational firm, Nordson (NASDAQ:NDSN) designs and manufactures dispensing equipment for consumer and industrial adhesives, sealants, and coatings. Moreover, it manufactures equipment used in the testing and inspection of electronic components, technology-based systems for curing and surface treatment processes as well as medical devices and component technologies. Despite it being one of the most relevant building materials stocks, NDSN slipped 9% on a year-to-date basis.

Nevertheless, contrarians might see this as an opportunity to pick up an underappreciated enterprise for cheaper. Financially, Nordson demonstrates strong fiscal stability with an Altman Z-Score of 6.5. Operationally, it posts an okay three-year revenue growth rate of 5.7%. More impressively, though, Nordson’s FCF growth rate during the same period is 13.1%, above nearly 63% of its rivals.

Plus, the company benefits from excellent profitability stats. Notably, its net margin comes in at 19.18%, ranked better than 92.14% of other infrastructure stocks. Turning to Wall Street, analysts peg NDSN as a consensus strong buy. Their average price target hits $252.20, implying nearly 17% upside potential.

IDEX Corporation (IEX)

Headquartered in Lake Forest, Illinois, IDEX (NYSE:IEX) engages in the development, design, and manufacture of fluidics systems, optics systems, fire and rescue equipment, and other specialty engineered products. Presently, it carries a market cap of $15.71 billion. Since the Jan. opener, IEX lost more than 9% of its equity value. However, it gained 6% in the past 365 days.

As with the other infrastructure stocks to buy on this list, Idex demonstrates a stable and predictable profile. First, it features decent (though again not great) stats on its balance sheet. Most impressively, its Altman Z-Score hits rather high at 5.98. Operationally, Idex’s three-year revenue growth rate posts up at 8.7%, beating 63.32% of its peers.

Notably, the company’s trailing-year net margin stands at an impressive 18.44%, outpacing 91.35% of sector players. Also, IDEX is a consistently profitable enterprise. Looking to the Street, analysts peg IEX as a consensus moderate buy. Their average price target lands at $243.11, implying 17% upside potential.

Ferguson (FERG)

A British-American multinational plumbing and heating products distributor, Ferguson (NYSE:FERG) gets its hands dirty, quite literally. Nevertheless, it’s one of the best infrastructure stocks for 2023 because nobody really thinks about plumbing until it goes bad. And since few people want to enter that profession, Ferguson enjoys a strong, stable footprint.

Since the Jan. opener, FERG gained over 7% of equity value. In the past one-year period, it’s up over 8%. On the financial front, Ferguson doesn’t do anything particularly impressive. Rather, it just gets the job done and done consistently. As you might imagine, profitability represents its strong suit, with a net margin of 6.98%, beating out 71.33% of its peers. Also, it posts net income year after year.

Also, Ferguson enjoys decent growth stats as well. Its three-year revenue growth rate hits 11.2%, above 69.66% of other infrastructure stocks. Finally, analysts peg FERG as a consensus moderate buy. Their average price target comes out to $167.92, implying almost 22% upside potential.

Carlisle Companies (CSL)

A diversified company that designs, manufactures, and markets a wide range of products, Carlisle Companies (NYSE:CSL) serves a broad range of niche markets to customers worldwide. These markets include commercial roofing, energy, agriculture, lawn and garden, mining and construction equipment, aerospace and electronics, dining and food delivery, and healthcare. Thus, it’s one of the eclectic construction stocks available.

Since the January opener, CSL slipped 7%. In the trailing one-year period, it fell 13%. Despite the red ink, CSL could potentially intrigue speculators. Operationally, Carlisle features a strong three-year revenue growth rate of 17.2%. This stat beats out 84.63% of other building materials stocks. Also, its FCF growth rate during the same period is 13.4%, above 63.46% of its peers.

Enticingly, the market prices CSL at a price-earnings-growth (PEG) ratio of 0.67. In contrast, the sector median stat is at a loftier 1.25 times. On a final note, analysts peg CSL as a unanimous strong buy. Their average price target stands at $314.44, implying over 44% upside potential.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.