10 Best Construction Stocks to Buy Now

1. CRH plc (NYSE:CRH)

Number of Hedge Fund Holders: 90

CRH plc (NYSE:CRH) provides building materials solutions in Ireland and internationally. The company remains a critical player in the broader construction industry as it makes building materials such as cement, concrete, and aggregates which are utilized in construction projects. CRH plc (NYSE:CRH) demonstrated robust pricing discipline, mainly in the Americas segment, which places it well for future margin expansion. With the company continuing to strengthen its market position in North America, it might gain increased pricing power, enabling it to pass on cost increases to customers more effectively. The company has announced the acquisition of Dutra Materials.

Dutra Materials complements CRH plc (NYSE:CRH)’s Americas Materials Solutions business in the Western US, bringing additional strategic aggregate reserves and asphalt production capabilities to help northern California construction market. Furthermore, CRH plc (NYSE:CRH)’s emphasis on the potential for margin expansion is aided by its focus on high-value products and its strategic positioning in markets having favorable supply-demand dynamics. With the expectations of higher infrastructure spending in the US, the company remains well-placed to benefit from large-scale projects offering better margins.

L1 Capital, an investment management firm, released its Q3 2024 investor letter. Here is what the fund said:

“CRH plc (NYSE:CRH) (Long +24%) shares rallied over the quarter, supported by a constructive Q2 earnings result and an increase to FY24 EBITDA and EPS guidance. The June quarter was affected by adverse U.S. weather conditions and heavy rains which negatively impacted volumes. CRH was able to offset these impacts and continue to deliver double-digit earnings growth, (unlike several U.S. listed peers who were forced to cut guidance). We believe this illustrates the quality of the company’s vertically integrated business model and the strength of its management team in navigating more challenging market conditions. CRH remains exposed to the ‘golden age’ of infrastructure spending in the U.S., which will underpin many years of robust demand. The Infrastructure Investment and Jobs Act (‘IIJA’), the Inflation Reduction Act (‘IRA’) and the Chips and Science Act will together add roughly US$2 trillion of investment to ageing U.S. infrastructure.”

While we acknowledge the potential of CRH as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than CRH but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.

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