Exploring the Resilience and Profitability of Infrastructure Companies in a Volatile Market

Apart from 2020, when airports and toll roads were hardly used due to the pandemic, infrastructure companies could have increased operating profit before depreciation every year. However, there are clear differences within the infrastructure sector, because more cyclical infrastructure segments, for example from the transport and traditional energy sectors, are sometimes even more volatile than the broad stock market. “In the current environment, segments with drivers that are not dependent on the economy are particularly in demand,” explains Maier. “This includes digital infrastructure companies like Equinix and Crown Castle because they can rely on consistent cash flows through all phases of the business cycle.” Data center operators also benefit from the boom in artificial intelligence, because high-performance data processing takes place in the background on the servers in data centers. In addition, the operators of electricity and telecommunications networks as well as radio masts would often receive remuneration linked to inflation, which would be implemented with a time lag and would also support profits.