4 Stocks Soaring Higher On Biden's Infrastructure Plan

NYSE: BHP | BHP Group Limited American Depositary Shares (Each representing two Ordinary Shares) News, Ratings, and Charts

The incoming Biden presidential administration aims to spend $2 trillion on its proposed infrastructure plan that is designed to address climate change while building a new, eco-friendly infrastructure — ranging from transportation to energy. Biden’s policies are expected to incentivize the private sector to accelerate plans to cut carbon emissions and, by doing so, boost metals prices in the coming months.

According to Moody’s, Biden’s plan — which includes investments in education, social safety net, healthcare, clean energy, and infrastructure — would result in average annual gross domestic product (GDP) growth of 4.2% between 2020 and 2024, and 2.9% between 2020 and 2030. The plan is also expected to achieve an unemployment rate of 4.1% by 2022, significantly lower than the prevailing 6.9% rate.

BHP Group (BHP), Caterpillar Inc. (CAT), Rio Tinto Group (RIO), and United States Steel Corporation (X) have started to see modest improvements in their production volumes amid the growing optimism around the potential of Biden’s proposals. With an expected V-shaped economic recovery this year, we believe these stocks should be solid bets right now.

BHP Group (BHP)

BHP is a global resources company and producer of various commodities, including iron ore, metallurgical coal, copper, and uranium. Its businesses include Minerals Australia, Minerals Americas, Petroleum, and Marketing. The company manages product distribution through its global logistics chain, including freight and pipeline transportation.

Last November, BHP completed the acquisition of an additional working interest in Shenzi from Hess Corporation (HES) for $505 million, bringing its total interest to 72%. The acquisition is consistent with its strategy of targeting counter-cyclical acquisitions in high-quality producing assets, and it will add more than approximately 11,000 barrels of oil production per day.

Earlier this month, BHP and Toyota (TM) Australia entered a partnership for a Light Electric Vehicle trial to reduce the emission intensity of its light vehicle fleet. This partnership will reduce BHP’s dependence on diesel and will help the company achieve its medium-term target of reducing operational emissions by 30% by 2030.

Despite supply chain disruptions, BHP has continued to operate through the pandemic and deliver strong results. The company has started its latest financial year with a strong first quarter of production performance driven by solid results in metallurgical coal and iron ore.

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