A Small Cap Infrastructure Trio

Atkore’s earnings per share are projected to climb 55% in fiscal 2021 ending September, The current four-analyst consensus for fiscal 2022, calling for a 14% profit slump, seems unduly bearish. Expectations also seem conservative for long-term sales growth, projected at a modest 2%.

Atkore shares have surged 90% this year but still look attractively valued. The stock has a trailing P/E ratio of 17, versus the median of 26 for electrical components stocks in the S&P 1500 Index.

If Atkore’s trailing P/E rises to 18 and it meets the consensus profit estimate of $5.86 per share for fiscal 2021, the shares would reach $105 by November. Atkore is a Buy.

Few companies are better positioned to benefit from an infrastructure bill than Eagle Materials (EXP), which supplies cement and wallboard to the infrastructure, commercial and residential construction markets.

Infrastructure spending drives about half of U.S. cement demand, followed by homebuilding as the second-biggest driver. With housing inventories near historic lows, Eagle should get a boost from continued growth in residential construction.

Eagle says state budgets are holding up better than some investors had feared at the onset of the pandemic, which should support low-single-digit growth for concrete demand, even without federal support. The consensus expects Eagle’s per-share profits to rise 13% in fiscal 2022 ending March on 6% higher revenue.

Over the next five years, profits are projected to rise at a 7% clip on annualized revenue growth of 8%. Although analyst estimates have marched higher over the past 90 days, expectations still seem modest given the magnitude of the U.S. infrastructure bill circulating through Congress. Eagle Materials is a Buy.

A key player in the electrical-construction industry, MYR Group (MYRG) has attracted a customer base that includes utilities, independent power producers, and industrial and transmission companies.

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