Looking for growing businesses is a big part of investing. Before buying stocks, knowing how a company can perform and expand in the future is just as important as its past success. Here are two companies that are majors in their industries and have growth potential for the future.
Transurban Group (ASX: TCL) develops, operates and maintains major toll roads and tunnels like the M2, M5 motorways and the Lane Cove Tunnel in Sydney as well as the Southern Link and Western Link motorways in Melbourne. It also has toll roads near Washington D.C. in the US.
The company's next step is to win the bidding for five major toll roads and tunnels in Brisbane that the Queensland Investment Corporation (QIC) controls through its Queensland Motorways Ltd (QML). Transurban will be in a consortium with Australian Super.
Such buying opportunities are uncommon. Toll roads have natural barriers to entry for competitors and are expensive to develop. Owning a substantial stake in QML would be a great advantage for the company.
Improvement in the housing market is driving share prices for building materials companies like Boral Limited (ASX: BLD). Since July 2013, it is up over 30%. The company produces cement, concrete and quarry materials, plasterboard, roofing and cladding.
Residential housing construction companies like Stockland Corporation Ltd (ASX: SGP) and Mirvac Group (ASX: MGR) are reporting record volumes of pre-sales for homes that will be built in the near future. Building materials will be in high demand from this surge in housing.
It had a strong half year in FY2014 with an underlying net profit of $90 million, up from $52 million. After significant items, it reported a net loss of $26 million.
The company announced a new joint venture with USG Corporation, the largest producer of plasterboard in the US. This will allow it to grow in Asia and the Middle East and take advantage of USG's technologies.
Foolish takeaway
Transurban may give your portfolio steady income over the long-term because it manages and controls vital roads in major cities that many drivers use.
Boral has a promising growth story with the joint venture, giving it access to larger international markets. The US housing market has improved a lot since the GFC and Asia is urbanising, so the prospects are good.
