House passes $1 trillion bipartisan infrastructure bill that includes transport, broadband and utility funding! United Rentals and the story beyond

While I decided to deep dive into it. Here’s what drew my attention. United Rentals seems to be profiting from this. Here’s how

It makes money by buying, owning, and renting construction equipment. This is a picks and shovels play if you will for the money to be spent on.

Here’s the details of the bill indirectly the numbers on which United Rentals could capitalise on.

$110B for roads, bridges, and other major projects

$66B for rail and freight

$65B into broadband

$55B into water systems

$39B for public transit

Why should a construction company rent equipment – I’d prefer buying my own – The thought that crosses everyone’s mind. Well again, read a few blogs and some forums and here’s what I found out.

"So, you have to level some ground to put up a building? No problem, we will bring a few bulldozers and a planer by tomorrow."

"Ohh you have to pave a road now? And its in the city so you have to work at night? Alright, I’ll add construction lights to your order of concrete grinders and mixers. Do you want a bulldozer with that? yeah, I thought you would."

Construction businesses require new equipment after every phase completion and that’s where companies like united rentals come into the picture.

The numbers too don’t disappoint at the time of writing this blog the stock was valued at $401.63 up by 2.5% today. Market cap of $29.08B and P/E ratio of 24.3.


Will you invest? Or the uptick is short-lived?

Would Waste Management benefit as well?

I don’t see any reason why not. All of the construction will result in a large amount of waste.
To be honest, I don’t know much about waste management, but I’ll do some study and see what I can find out!

Great piece, and I completely agree with the Equipment as a Service pitch, but I suppose there really are occasions when organizations would want to own equipment. For example, it may make sense for businesses to purchase the machines they use the most regularly while renting the machines they need less often.
With financing rates so low, many corporations appear to be debating whether to invest in Opex or Capex. You can depreciate equipment if you buy and finance it, which is a good non-cash expenditure to have
In addition, if contractors encounter non-contract work, the construction manager will compensate them for any equipment expenses (Time and Materials).
Whereas if project owner is subsidising your equipment payments, you’re now increasing your capital base because you can always sell the equipment later, especially if it’s only been used for a few hours. Every infrastructure project goes over budget, so finding methods to maximise T&M is one way for a general contractor to outperform their competitors. A general contractor would prefer to focus solely on T&M, which is why main contractors want contracts to match interests.

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