Morgans: Key picks in infrastructure

There has been persistent uncertainty around the stock market and infrastructure stocks have provided a welcome haven for investors. Nathan Lead, Senior Analyst at Morgans, says there are a number of attributes that give infrastructure stocks their defensive appeal. 1) They provide essential services such as airports, toll roads, gas pipelines and are often ‘monopoly ‘ like assets 2) They tend to be insulated from the business cycle and economic shocks – so demand is resilient and; 3) Revenues tend to be insulated via long-term contracts or regulatory regimes and are often inflation linked. Lead says in the post GFC era many of these businesses have cleaned up their balance sheets and now boast investment grade credit ratings from the ratings agencies. Returns for infrastructure stocks have been ‘supercharged’ in recent years. In this video Lead discusses what has contributed to this performance and shares his key picks for the sector.