What are the advantages of investing in the infrastructure industry?
High barriers to entry;
Economies of scale (e.g., high fixed, low variable costs)
Inelastic demand for services (giving pricing power)
Low operating cost and high target operating margins; and
Long duration (e.g., concessions of 25 years, leases of 99 years)
Second, here is the value proposition:
Attractive returns
Low sensitivity to swings in the economy and markets
Low correlation of returns with other asset classes
Long-term, stable and predictable cash flows
Good inflation hedge
Low default rates; and
Socially responsible investing.
Source: Canadian Investment Review
Here are five foreign infrastructure stocks to consider:
1.Company: Vinci SA (VCISY)
Current Dividend Yield: 4.58%
Country: France
2.Company: Chicago Bridge and Iron Company NV (CBI)
Current Dividend Yield: 0.42%
Country: The Netherlands
3.Company: Hochtief AG (HOCFY)
Current Dividend Yield: N/A
Country: Germany
4.Company:Skanska AB (SKSBY)
Current Dividend Yield: 5.57%
Country: Sweden
5.Company: JGC Corp (JGC)
Current Dividend Yield: 1.51%
Country: Japan
Related ETF:
First Trust ISE Global Engineering and Construction Index Fund (FLM)
Disclosure: Long VCISY