If there was ever an issue that everybody can agree on in a bipartisan manner, it’s the fact that our nation’s infrastructure is crumbling. Everything from bridges and tunnels to roadways, electric grids and airports needs attention, and the bottom line is the attention can’t be put off any longer. The hard part is coming up with the funding, and if anything could derail the legislation, which both sides clearly want, it’s finding the money.

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A new research report from Jefferies building products analyst Philip Ng notes that funding may rest partially on an increase in the federal gasoline tax, which has remained the same since 1993. That could prove dicey, especially with gas prices at the highest levels in most areas of the country this year. The Jefferies report noted this when it comes to the bill’s funding:

Both parties will need to come to an agreement on funding and Republicans have already indicated that a tax increase is a nonstarter, and there is even division among Democrats around the gas tax, which can be viewed as a tax on the poor and working class. Industry leaders believe more than just a gas tax needs to be done to sustainably fund infrastructure, potentially including a vehicle mileage tax on trucking, electric battery taxes, and/or an inflation indexed gas tax. Additionally, policies that would reform the permitting process for large infrastructure projects could reduce the costs dramatically.

Funding aside, both Republicans and Democrats know this is not a partisan issue, and something that has to be agreed to at some point. One thing is for sure, certain companies could benefit from this endeavor, and the sheer size and scope could mean additional revenues for years. The Jefferies analysts see four top companies that could be big winners, and all are rated Buy at the firm.

Eagle Materials

This smaller cap material company offers solid upside potential for investors. Eagle Materials Inc. (NYSE: EXP) is engaged in the manufacture and distribution of gypsum wallboard and cement. It operates through the following segments: Cement, Gypsum Wallboard, Recycled Paperboard, Oil and Gas Proppants, and Concrete and Aggregates.

The Cement segment consists of raw material used in the production of Portland cement, which is calcium carbonate in the form of limestone. The Gypsum Wallboard segment mines and extracts natural gypsum rock, which is used in the manufacture of gypsum wallboard. The Recycled Paperboard segment includes paper fiber, water and paper chemicals and these recycled paper boards are sold to gypsum wallboard manufacturers.

Lastly, the Oil and Gas Proppants owns frac sand mines, wet processing plants and drying facilities, while the Concrete and Aggregates segment offers ready mix concrete, a building material that is used in construction.

Eagle Materials investors are paid a small 0.47% dividend. Jefferies has a $99 price target on the shares, while the consensus estimate across Wall Street is $95.58. The shares closed Thursday’s trading at $89.45 apiece.

Martin Marietta Materials

This company posted very solid first-quarter results and remains a favorite across Wall Street. Martin Marietta Materials Inc. (NYSE: MLM) is one of the largest U.S. suppliers of aggregates, with operations across 27 states, Canada and the Bahamas. Its largest concentration is in Texas, comprising approximately a third of its exposure.

The company remains upbeat not just on 2019 construction demand, but it also has noted that many states with the firm’s greatest exposure were well positioned for housing and public nonresidential construction growth.

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Martin Marietta Materials beat expectations for the latest quarter as weather cooperated for a change in most states where it does business. In addition, corporate management was very upbeat on the demand outlook, noting especially robust activity in North Carolina, Georgia and Florida, which comprise about 17% of sales.

Investors are paid a 0.86% dividend. Jefferies has a $245 price objective, and the posted consensus target price is $209.71. The stock ended Thursday at $222.94, up almost 2% on the day.

Summit Materials

This is another small cap play that looks like a solid idea for more aggressive accounts. Summit Materials Inc. (NYSE: SUM) is a construction materials company. It operates through the following segments: Cement, West and East. The Cement segment consists of its Hannibal, Missouri, and Davenport, Iowa, cement plants and distribution terminals along the Mississippi River from Minnesota to Louisiana.

The West segment includes operations in Texas, the mountain states of Utah, Colorado, Idaho, Wyoming and Nevada, and in British Columbia, Canada. The East segment serves markets extending across the Midwestern and eastern United States, most notably in Kansas, Missouri, Virginia, Kentucky, North Carolina, South Carolina and Nebraska, where the company supplies aggregates, ready-mix concrete, asphalt paving mix and paving and related services.

The $21 Jefferies price target compares with the $19.27 consensus target. The stock ended trading on Thursday at $17.49 a share.

Vulcan Materials

This top stock has been on a roll in 2019 and looks to press even higher the rest of the year. Vulcan Materials Co. (NYSE: VMC) is one of the largest producers of construction aggregates (crushed stone, sand and gravel) in the United States and a significant producer of aggregates-based construction materials (ready-mixed concrete and asphalt mix). Vulcan’s largest revenue-generating states are in Texas, California, Virginia, Georgia, Florida, Tennessee, Arizona, Illinois, North Carolina and Alabama.

Vulcan reported first-quarter earnings that were better than the S&P Capital IQ consensus estimate, and revenues that rose 16.6% year over year and also topped the consensus estimate. In addition, the company reaffirmed guidance for fiscal year 2019 and sees earnings per share in a range that includes the consensus forecast.

Management noted that broad-based shipment growth, compounding price improvements and solid operating efficiencies in the aggregates business contributed to 17% growth in total revenues and 29% growth in operating earnings.

Jefferies has set a $143 price objective for the shares. The posted consensus target price is $128.63, and the stock ended Thursday at $129.20, up well over 4% for the day.

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All four of these stocks have been acting very well, as Wall Street and investors are anticipating some sort of agreement between the president and Congress as this extremely important project is sorely needed across the country. Yet, none of these companies are among those getting the most from the government.

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