Top 3 Best Construction Stocks to Watch

Brandie E Blackler
9 Min read

The construction industry could be a common alternative for investors looking to diversify their portfolios.

Having seen quite a decline during the 2020 pandemic, the construction sector is trending upward again. 

The construction industry may go through occasional ups and downs, usually keeping up with how well the economy is doing as a whole.

Split into multiple segments, from residential buildings to infrastructure, the construction industry is vast and diversified. 

Knowing which construction sub-vertical to invest in, as well as the right moment to invest in, is important when it comes to construction stocks (or cyclical stocks in general, as mentioned further on in the article), given the economic influence. 

In this article, we will go through the basics of construction stocks, what you should consider before investing in them, as well as the pros and cons and the best construction stocks to watch. 

Sounds interesting? Let’s get started. 


Best Construction Stocks: An Introduction 

As mentioned earlier, the construction industry will go through some volatility, just like any other sector.

When the economy is performing generally well, the real estate market tends to follow and hence, so does the construction industry, typically speaking. Additionally, when the government is investing heavily in infrastructure, the construction industry also grows.

On the other hand, when the economy is in a downturn, construction stocks will also follow the same trend. Due to this, constructions are considered cyclical stocks, meaning that they will usually follow the economy’s fluctuation. 

Through 2022 and 2023, the construction industry once again found itself on the incline. With the real estate market still on the rise and ambitious infrastructure plans from the Joe Biden administration, the construction industry could possibly benefit from these trends. 

If you want to learn more about the financial markets, trading and investing, why not register for one of our free webinars? Click the banner below to sign up now:

Free trading webinars

Tune into live webinars hosted by our experienced traders

What are Construction Stocks? 

Grouping all aspects of construction-related companies under the same umbrella may seem like the simplest train of thought. However, the construction industry is usually split into three segments: buildings, infrastructure, and industrial. 

Let’s review these sub-sectors, below: 

Buildings Sector 

The buildings segment is the largest one in the construction industry, being further divided into residential and non-residential (or commercial).

This sector encompasses all related to residential and non-residential buildings, ranging from engineering to materials, contractors and subcontractors, as well as maintenance work. 


The infrastructure segment, also known as heavy civil engineering, is related to public works.

This includes transportation (such as bridges, subways, highways, railways, and airports) and utilities (sewers, pumping stations, communication, and power distribution, among others). 


The industrial segment is related to the exploration and transformation of natural resources; This sector of the construction business includes power plants, factories, oil refineries, offshore constructions, mines, mills, and manufacturing plants, among others. 

Advantages and Disadvantages of Construction Stocks 

Just like any other investment or business sector, construction stocks come with their own pros and cons. We will now take a look at the advantages and disadvantages of investing in construction stocks. 

 Advantages of Construction Stocks 

  • During periods of economic growth, construction stocks will experience potential gains, even outperforming the growth of the market in some cases. 
  • Construction stocks can be a reasonable investment to choose when the economy is trending upwards, generally speaking. Big construction companies will likely follow that same trend, providing historical insight for investors. 
  • Some of the biggest names in the construction industry can still turn a profit even when the economy slows down. These stocks may not grow as fast as some others, but they can still be a long-term investment even in economic downturns. 

Disadvantages of Construction Stocks 

  • Construction stocks depend on getting the timing right, in most cases. Investing or trading at the wrong time in the economic cycle can turn a potential profit into significant losses. 
  • The construction industry is exposed to the commodity market. If you decide to invest in construction stocks, make sure to also monitor commodities prices to best analyse your investments. 
  • Bigger companies are generally safer investments, however, can also offer smaller returns given they may be more established and hence less volatile. Again, you will have to strike the right balance between risk and reward, according to your investing strategy

Would you like to start your trading journey by practising with virtual funds via a demo account? You can trade with virtual funds for free at Admirals - Click the banner below to register today:

Trade with a risk-free demo account

Practise trading with virtual funds

Top 3 Best Construction Stocks to Watch 

Having gone through some of the basics about construction stocks, we will now take a look at some of the best construction stocks to watch. 

1. Caterpillar Inc (CAT) 

Caterpillar is one of the biggest, and oldest, companies in this list. Founded back in 1925, the American company is the world’s leading manufacturer of construction equipment. 


  • Caterpillar has a diversified line of products, which includes heavy industrial and construction equipment, engines and locomotives - to name a few. The company also profits from spare part sales and recently added a financial products branch. 


  • As one of the biggest names in the construction industry, Caterpillar faces heavy exposure to the commodities market. Problems in the supply chain may potentially hurt the company. 

Trade the CAT CFD in both price directions at Admirals.

2. Nucor Corp. (NUE) 

Nucor is the largest steel producer in the US and is also among the largest in the world. NUE set itself apart by investing in the more advanced electric arc furnaces (EAF) to melt scrap steel, instead of the traditional blast furnaces used to melt iron.


  • Due to its direct investment in emerging technology, Nucor can remain competitive even when there is a drop in demand for steel. 


  • Nucor faces serious competition from overseas, which usually offers steel at a lower cost.

You can trade the NUE CFD in both price directions, or invest in shares directly

Below you can view the Daily fluctuations of NUE shares via the Trading View widget:

 *Past performance is not representative of future results.

3. United Rentals Inc (URI) 

United Rentals is the world’s largest company in the industrial equipment rental segment. URI offers a wide range of products, going from forklifts and homeowner equipment to compressors, trucks, and even earth movers. 


  • United Rentals isn’t restricted to renting equipment to the construction industry. The company’s other services include trench safety training, renting power generators, renting trailers stocked with tools, and renting out portable toilets. United Rentals also offers radio and drone services. 


  • United Rentals does not pay dividends, offering share buybacks as a return to investors. 

Trade URI CFDs in both price directions, or invest in the shares directly

How to Buy Construction Stocks 

One option for investing in the best construction stocks to watch is via a regulated online broker. A trusted and regulated broker like Admirals will provide you with access to the construction stocks available in the market, among other financial instruments. 

At Admirals, you can strategise, analyse, invest and trade with the MetaTrader 5 tool, available for Android, iOS, Windows, and Mac.

MetaTrader 5 is the world’s #1 multi-asset platform, used by investors from all over the globe. With MetaTrader 5, you can trade both long and short, invest in shares directly, and use a variety of tools at your disposal. 

  • MetaTrader 5 is easy to use, offering a wide range of features: 
  • Access to personalized charts. 
  • Free market news and data. 
  • Educational tools. 
  • AI trading robots and automated trading. 

You can sign up today at Admirals and start trading right away with a live account. However, if you are still new to investing, you can sign up with a demo account instead. 

Best Construction Stocks to Watch: Conclusion 

Construction stocks can be a potential addition to diversifying a trading portfolio, but you need to take a few things into consideration.

The construction industry is directly tied to the current economic scenario. If the economy is booming, then construction stocks could offer potential returns. 

However, keep in mind that construction stocks can take some heavy losses once the economy slows down. The sector’s demand will naturally drop, which means that you should understand the importance of timing with cyclical and industry-specific stocks. Investing in construction stocks at the wrong moment could potentially lead to losses. 

As always, you should consider the pros and cons of construction stocks before investing. Take your investing strategy into account, and then decide whether or not they are a good option. 

If you'd like to start trading construction stocks and other financial assets, you can register now for a free live trading and investing account with Admirals - Click the banner below to get started:

Open a Live Account

Trade the Live Markets and Expand Your Trading Horizons


What are the best construction stocks to invest in?

Subjectively speaking, some of the top 3 best construction stocks to invest in include:

  1. Caterpillar Inc (CAT)
  2. Nucor Corp (NUE)
  3. United Rentals Inc (URI)


What is the fastest growing construction market?

It is projected that over the next 5 years, the fastest growing construction market will be the multifamily housing construction segment (apartments).


Other Suggested Articles of Interest:



The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admirals' investment firms operating under the Admirals trademark (hereinafter “Admirals”). Before making any investment decisions please pay close attention to the following:

1. This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.

2. Any investment decision is made by each client alone whereas Admirals shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.

3. With view to protecting the interests of our clients and the objectivity of the Analysis, Admirals has established relevant internal procedures for prevention and management of conflicts of interest.

4. The Analysis is prepared by an independent analyst (hereinafter “Author”) based on Brandie E Blackler, Financial Analyst, personal estimations.

5. Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admirals does not guarantee the accuracy or completeness of any information contained within the Analysis.

6. Any kind of past or modeled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admirals for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.

7. Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved.

How to Build an Investing Portfolio - 5 Strategy Examples
In this article, we go through what an investment portfolio is, how to build one and several investing portfolio examples. Table of Contents What is an Investment Portfolio? 5 Investing Portfolio Examples How to Build an Investing Portfolio in 3 Steps Conclusion FAQs on Building an Investin...
4 Best Investments for 2024
If you’re thinking about your long-term financial future, then investing may be a key part of your plan. In this '4 Best Investments' guide, we cover some of the best investment trends for this year and how to start investing in them with competitive commissions and premium analytical tools. Table...
Top 5 Best 3D Printing Stocks to Watch: Invest in 3D Printing
Let's enter the world of 3D printing stocks, where innovation meets investment potential. Over the last decade, 3D printing technology has proven to be a transformative force across various verticals. As this cutting-edge technology continues to evolve and disrupt traditional manufacturing methods,...
View All