The Transurban Group (ASX: TCL) share price has been surprisingly resilient in 2020. The Aussie infrastructure share slumped 38.6% in the space of a month during the March bear market.
Investors were worried that the coronavirus pandemic would see traffic numbers plummet across Transurban's portfolio. Less traffic means less toll road revenue and ultimately less free cash flow for investors.
Ultimately, that did turn out to be the case. Transurban's traffic figures slumped 90% lower in the midst of sweeping restrictions.
However, the Transurban share price is down just 1.2% in 2020. That says to me investors aren't nearly as bearish as they were on the Aussie infrastructure group. But I also feel like it's an undervalued cash cow in the current market.
Why the Transurban share price could be a cash cow
Transurban may, in fact, see an uptick in traffic from the pandemic. I see a couple of drivers that could lead to this result in 2021 or beyond.
The first is a shift towards work from home and more remote working arrangements. This is allowing employees to live further away with longer commutes but less frequency.
Ultimately, many of these people will need car transportation options. That paves the way for Transurban to increase traffic numbers just from a shift in commuting habits. In a perfect world, investors would see that hit the bottom line and boost the Transurban share price higher.
The other factor is restricted public transport numbers and perceived safety. Less people are interested in sitting on public transport while COVID-19 is a threat.
That could mean the toll roads operated by Transurban could be a good option. I think this two-prong approach could actually see the Transurban share price outperform the S&P/ASX 200 Index (ASX: XJO) in 2021.
Even if the capital gains don't shine through, Transurban shares are yielding 3.2% p.a. right now. If cash generation was high, we could even see a special dividend or even increased ordinary dividend in FY21.
Foolish takeaway
I think the macro environment is very solid for the Transurban share price. North America traffic has been slower to return but I think that will recover given time.
Combine strong cash generation ability with high-quality infrastructure assets and I think the Aussie infrastructure group could be in the buy zone.
