New Era, New Opportunities: Construction Stocks Poised for Growth
As the dust settles on the election, the focus shifts to the incoming Trump Administration and its impact on the economy. One sector that stands to benefit from the new policies is construction, with reduced regulation and potential lower corporate tax rates set to provide a boost.
A Boost for Multiple Sectors
According to UBS chief global equity strategist Andrew Garthwaite, the construction sector, along with real estate, energy, finance, and construction, will reap the benefits of a deregulation regime. These interconnected sectors will have a ripple effect on the economy, making them an attractive investment opportunity.
Two Construction Stocks to Watch
UBS analyst Steven Fisher has identified two construction stocks that are poised for growth: Vulcan Materials (VMC) and Martin Marietta Materials (MLM). Both stocks have Strong Buy consensus ratings from Wall Street, based on recent reviews.
Vulcan Materials: A Leader in Aggregates
Vulcan Materials is the nation’s largest producer of aggregate materials for the construction industry, operating across 22 states, plus DC, Canada, Mexico, the Bahamas, and the US Virgin Islands. With a strong product list, superior distribution and logistics systems, and a reputation for proven expertise, Vulcan is well-positioned to benefit from an improving construction market.
Fisher believes that Vulcan’s recent misses in its 3Q24 report are not a cause for concern, and sees the company as a beneficiary of an improving non-residential construction market in 2H25-2026. He expects this to support 3-4% aggregates volume growth in ’26 and bolster VMC’s pricing power.
Martin Marietta Materials: A Legacy of Quality
Martin Marietta Materials has a long history in American industry, dating back to 1939. The company provides heavy construction materials and aggregates for the building industry, with a strong presence across the United States.
Fisher believes that Martin Marietta’s share price does not fully reflect the company’s potential, citing the earnings growth potential from a supportive construction market combined with the company’s SOAR strategic framework.
A Bright Future Ahead
Both Vulcan Materials and Martin Marietta Materials are poised for growth, with Fisher expecting a reacceleration in nonresidential construction activity in 2H25 into 2026 to drive aggregates volume growth. With solid cash flow over the next 12 months, these companies are well-positioned to reap the benefits of an improving construction market.
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