My top stock picks for 2021 come from three industries that are perfect for this era: infrastructure, renewable energy and marijuana.
It’s now official—Joe Biden has won the presidency. During his campaign, he made a lot of promises, many of which will increase government spending and raise taxes. Of course, whether or not his proposed policies sweep through Congress will depend upon the January 5 Senate run-off elections in Georgia, which will determine if the Senate has a Democratic or Republican majority.
But no matter how that election turns out, you can bet that government spending will rise. And the sectors that are likely to benefit are infrastructure, renewable energy, and marijuana.
As I wrote in these pages in October, America’s infrastructure is in dire straits:
- There are 850 main breaks in North America, daily, which costs some $3 billion annually to repair.
- Aging power grid built in the 19th century, which hasn’t seen a lot of upgrades since. Utilities are making annual $100 billion investments to upgrade their aging grids.
- Our 54-year-old interstate highway system of 48,444 miles needs some desperate attention, and our interstate bridges average 45 years in age and 27% of them need repair or replacement, with 56% of them in only “fair” condition.
Renewable energy is on the rise. Between 2010 and 2018, annual wind and utility-scale solar additions averaged about 6.9 GW and 3.6 GW, respectively, and this year it was forecasted that nearly 72 GW of wind and solar plants would come online, according to S&P Global Market Intelligence data.
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Lastly, following the November election, marijuana is legal for all adults in 11 states, and for medical purposes in 34. And there is a push to make it legal federally; the house has voted for it, but the Senate hasn’t yet followed through.
I began searching for stocks in these three industries, and found 30 that looked interesting. After applying my fundamental and technical analysis, I came up with three top stock picks for 2021, that I think look attractive right now.
Top Stock Picks for 2021
Best Infrastructure Stock: U.S. Concrete, Inc. (USCR)
U.S. Concrete, Inc. produces and sells ready-mixed concrete, aggregates, and concrete-related products and services to the construction industry in the United States, the U.S. Virgin Islands, and Canada. It operates through two segments: Ready-Mixed Concrete and Aggregate Products. The Ready-Mixed Concrete segment engages in the formulation, production, and delivery of ready-mixed concrete to customers’ job sites; and the provision of various services that include the formulation of mixtures for specific design uses, on-site and lab-based product quality control, and customized delivery programs. The Aggregate Products segment offers crushed stone, sand, and gravel for use in commercial, industrial, and public works projects. The company’s other products include building materials stores, hauling operations, aggregates distribution terminals, a recycled aggregates operation and concrete blocks, as well as products, including ARIDUS Rapid Drying Concrete technology and the Where’s My Concrete family of Web and mobile applications. It primarily serves concrete general contractors, government agencies, and developers, architects, engineers, and home builders. The company was founded in 1997 and is based in Euless, Texas.
- Beat EPS estimates by $0.22 last quarter
- Next year’s expected growth: 19.3%
- Analyst ranking: Strong Buy
Best Renewable Energy Stock: Atlantica Sustainable Infrastructure plc (AY)
Atlantica Sustainable Infrastructure plc acquires, owns, and manages renewable energy, natural gas, transmission and transportation infrastructures, and water assets in the United States, Canada, Mexico, Peru, Chile, Uruguay, Spain, Algeria, and South Africa. It owns 25 assets comprising 1,496 MW of aggregate renewable energy installed generation capacity; 343 MW of natural gas-fired power generation capacity; 1,166 miles of electric transmission lines; and 10.5 million cubic feet per day of water desalination assets. Atlantica was founded in 2013 and is based in Brentford, the United Kingdom.
- Beat EPS estimates by $0.22 last quarter
- Next 5-year estimated annual growth: 49.5%
- 65% dividend yield
- Analyst ranking: Strong Buy
Best Marijuana Stock: Tilray, Inc. (TLRY)
Tilray, Inc. engages in the research, cultivation, processing, and distribution of medical cannabis. The company offers its products to patients, physicians, pharmacies, governments, and hospitals; and for researchers for commercial purposes, as well as compassionate access and clinical research applications. It operates in Argentina, Australia, Canada, Chile, Croatia, Cyprus, the Czech Republic, Germany, Israel, Ireland, New Zealand, South Africa, Switzerland, the United States, and the United Kingdom. The company was incorporated in 2018 and is headquartered in Nanaimo, Canada.
- Although not yet profitable, the company’s loss in its latest quarter was $0.19 less than forecast
- Next year’s expected growth: 80.8%
- Analyst ranking: Strong Buy
I hope that one or more of these top stock picks for 2021 will fit into your investment strategy. And I wish you a healthy and happy holiday season!
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