Oil at US$100 a barrel, rising gas benchmarks and blocked shipping lanes in the Red Sea have put energy security and core infrastructure right in the spotlight. For investors, sudden moves in commodities and geopolitics can quickly reshape the outlook for construction and infrastructure stocks that keep transport and energy systems running. This article looks at how the latest Middle East tensions and supply worries intersect with that theme, and sets out 3 stocks from our Global Infrastructure and Construction Stocks screener that appear positively exposed to the current backdrop, helping you decide whether they deserve a closer look or a place on the watchlist.

Weir Group (LSE:WEIR)

Overview: Weir Group is a Glasgow based engineering company that supplies highly engineered equipment, wear parts and digital solutions to mining and energy customers worldwide, helping them move and process abrasive materials efficiently through brands like Warman, ESCO and GEHO.

Operations: Weir Group generates most of its revenue from the Minerals segment at £1.86b, with the ESCO segment contributing about £709.8m and a small amount of inter segment sales.

Market Cap: £6.56b

Weir Group may appeal to investors looking for companies tied to mining and energy infrastructure at a time when supply security is in focus, with demand for critical minerals and efficiency gains supporting forecasts for mid single digit revenue growth and earnings growth around 13.5% a year. The business is focusing on higher margin digital and service offerings that aim to lift operating margins, while analysts see upside to the current share price based on their targets and fair value work. On the other hand, there are notable risks including high debt funding, exposure to commodity cycles and a recent period of weaker earnings and share price performance. How these strengths and risks balance out is where the opportunity, or caution, lies for Weir Group investors.

Weir Group’s push into higher margin digital and service revenue, alongside forecasts for improving earnings, could be masking a bigger story about its balance sheet strength and vulnerability to cycles. This becomes clearer in the Weir Group financial health report

National Atomic Company Kazatomprom JSC (LSE:KAP)

Overview: National Atomic Company Kazatomprom JSC is a Kazakhstan based uranium producer that explores, mines, processes and sells uranium and related products for nuclear fuel, while also processing rare metals and providing technical, security and logistics services to customers across major global nuclear markets.

Operations: Kazatomprom generates the bulk of its revenue from the Uranium segment at KZT 1,576,005m, with other activities contributing KZT 283,371m and its Ulba Metallurgical Plant adding KZT 92,360m, partly offset by KZT 208,872m of eliminations.

Market Cap: $17.9b

National Atomic Company Kazatomprom JSC may be of interest to investors looking at infrastructure linked stocks because it sits at the heart of the uranium supply chain at a time when utilities are seeking secure, long term fuel contracts and analysts highlight a market that has shifted from surplus to concerns about primary supply. The company combines a cost efficient resource base and high current profit margins with forecasts for double digit earnings growth, yet trades on valuation metrics that some investors see as undemanding. However, Kazatomprom faces risks, including higher operating and logistics costs, regulatory constraints on production and exposure to geopolitical routes. This means the current combination of strong fundamentals, uranium demand and elevated energy security concerns presents a mix of potential opportunities and vulnerabilities for investors.

Uranium supply anxiety, high margins and what some see as undemanding valuation metrics make Kazatomprom hard to ignore, yet the real kicker sits in the full 2 key rewards and 1 important warning sign

China Yuchai International (CYD)

Overview: China Yuchai International manufactures and sells diesel, natural gas and alternative fuel engines used in trucks, buses, construction and agricultural equipment, marine vessels and power generation. It also provides related parts, repair and training services, and has a smaller hospitality and property arm.

Operations: The company generates virtually all of its revenue from the Yuchai engine segment at about CN¥18.0b, with the HLGE hospitality and property unit contributing roughly CN¥31.1m.

Market Cap: US$1.7b

China Yuchai International provides exposure to heavy duty engines that support transport, ports and power systems, at a time when energy security and shipping resilience are front of mind. Earnings growth has recently outpaced both the Machinery industry and the wider US market. The stock trades on a P/E below sector averages and below some estimates of its fair value. The company pays a cash dividend and holds a strong cash position, while also investing in hydrogen, methanol and hybrid powertrains to adapt to tougher emissions rules. However, profits still rely heavily on traditional engines, external borrowing and concentrated exposure to China, which makes the full risk reward trade off worth a much closer look in the context of rising oil and gas prices.

China Yuchai International’s low P/E, strong cash position and push into hydrogen and hybrid engines hint at a story the headline numbers miss, and the real twist sits inside the analysis report for China Yuchai International

The three stocks covered here are just a starting point, with the full Global Infrastructure and Construction Stocks screener uncovering 38 more companies that sit at the heart of global infrastructure and construction with equally compelling stories behind their numbers. Use Simply Wall St to identify and analyze the specific catalysts, capital allocation and risk factors that matter to you so you can focus on the highest conviction ideas in this theme.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.