Top British stocks to buy for the infrastructure boom

first_img Paul Summers | Tuesday, 15th June, 2021 | More on: AHT SOM Our 5 Top Shares for the New “Green Industrial Revolution” Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. See all posts by Paul Summers Assuming economies around the world do fully unlock in 2021, I think we could see an infrastructure/construction boom before long. With this in mind, here are what I consider to be the best British stocks to buy in this space. Return to formAt the end of last month, I said I’d be prepared to snap up FTSE 100 equipment provider Ashtead (LSE: AHT) based on my belief that there wouldn’t be any nasty surprises in today’s Q4 trading update. Positively, this has proven to be the correct call — the share price is up almost 3.5% as I type, on some very attractive numbers.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Revenue jumped 23% to £1.27bn in the final three months of Ashtead’s financial year as the company returned to growth. Understandably, the vast majority of this came from rental revenue. For FY21 as a whole, a 3% rise was logged at constant exchange rates (£5.03bn).All told, Ashtead reported a pre-tax profit of £220m for Q4. That’s a stonking 158% jump compared to the same period in 2020. Nevertheless, a final figure of £936m for the entire year was 1% down due to the impact of Covid-19. Other highlights from today’s statement include the 75% jump in free cash flow to record levels (£1.38bn) helping to reduce leverage from 1.9 times to 1.4 times. Although most definitely not a high-yielding stock, the 3.7% increase to the total dividend was also indicative of a company recovering well.So, would I buy?Actually, yes I would. In addition to already-excellent operating margins and an international presence, Ashtead begins its new financial year “with clear momentum”, according to CEO Brendan Horgan. With leaders including President Joe Biden intending to spend big on infrastructure, this doesn’t sound like hyperbole. In fact, I think Ashtead is, quite literally, one of the best picks and shovels plays around.Of course, there’s no sure thing in investing. A rise in the number of infections in Ashtead’s key markets may cause delays to projects, as might a shortage of materials. One also wonders if the company’s valuation — 28 times forecast earnings before the market opened — might prove too rich for some. Naturally, Ashtead isn’t the only option. Another of the best British stocks to buy in this sector, in my opinion, can be found lower down the market.Growing flat-outI’ve been bullish on laser-guided equipment manufacturer Somero Enterprises (LSE: SOM) for ages now. Some of this is probably down to old-fashioned bias (I hold the stock). However, recent stronger-than-expected trading in the US provides some substance. Assuming the company reports more good news in today’s annual general meeting, previous guidance could be exceeded again. Somero products ensure concrete is perfectly level. This may sound dull, but it’s essential for buildings like warehouses. And thanks to the explosion of online shopping following multiple lockdowns, those warehouses will be in even greater demand from retailers going forward.Again, there are risks. Like Ashtead, Somero could be impacted by a slowdown in projects. Its minnow status also means the latter’s share price could prove more volatile than its FTSE 100 peer.  Then again, on 17 times forecast earnings, Somero is considerably cheaper. It also generates far higher returns on capital (ROCE), has net cash on its balance sheet, and frequently showers its investors with cash. As such, I’d have no issue buying more today. Our 6 ‘Best Buys Now’ Shares Access this special “Green Industrial Revolution” presentation now Image source: Getty Images center_img It was released in November 2020, and make no mistake:It’s happening.The UK Government’s 10-point plan for a new “Green Industrial Revolution.”PriceWaterhouse Coopers believes this trend will cost £400billion……That’s just here in Britain over the next 10 years.Worldwide, the Green Industrial Revolution could be worth TRILLIONS.It’s why I’m urging all investors to read this special presentation carefully, and learn how you can uncover the 5 companies that we believe are poised to profit from this gargantuan trend ahead! Paul Summers owns shares in Somero Enterprises. The Motley Fool UK has recommended Somero Enterprises, Inc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Enter Your Email Address Top British stocks to buy for the infrastructure boom I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Simply click below to discover how you can take advantage of this.last_img

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