3 Top Construction Machinery Stocks to Buy in 2017 — The Motley Fool

Ever walk past a construction site? It’s hard not to be enthralled by all the heavy construction machinery moving things around. With the world’s developing economies still building at a relatively fast pace and developing economies, like the United States, in desperate need of upgrading their aging infrastructure, the companies behind that construction machinery could be just as exciting as a construction site in the years ahead. Which is why Caterpillar Inc. (NYSE:CAT), Cummins Inc. (NYSE:CMI), and Terex Corporation (NYSE:TEX) are three of the top construction machinery stocks to look at right now.  

1. The big yellow giant

Roughly 40% of Caterpillar’s first-quarter sales were tied to its construction business. The rest was split between energy and transportation (35%) and mining (17%). That said, Cat hasn’t exactly been hitting it out of the park lately; between 2012 and 2016, sales at the company fell a massive 40%.  

Image source: Terex Corporation.

However, Caterpillar is a leading name in the construction equipment industry backed by a global support network that’s pretty much unrivaled. Simply put, it’s well positioned. And it looks like things might be starting to get better. For example, the first quarter was the first quarter in two and a half years that Caterpillar’s sales and revenues were up year over year. Profits in all three business segments improved in the quarter, too, with notable strength in the long floundering mining business (which Cat calls its resource segment).  

Caterpillar’s shares have been heading higher since hitting bottom in early 2016. However, if you’re looking to invest in a leading construction equipment name, Cat needs to be on your short list. And now could be a good time, since management just increased full year revenue guidance after its solid first-quarter showing.  

2. Powering the machines

Next up is Cummins, which isn’t a pure play…

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