Credit Suisse picks EV and energy stocks for a piece of the $2 trillion infrastructure plan

Published Thu, Apr 15 20212:50 AM EDTUpdated Thu, Apr 15 20219:28 AM EDT

Lucy Handley @in/lucy-handley-b2b0a61a/@lucyhandley

Credit Suisse has picked dozens of energy stocks with "high quality and momentum," including companies that make components for electric vehicles. Investors have piled into EV-related stocks as the vehicles gain in popularity. Last month, U.S. President Joe Biden announced a $2 trillion infrastructure proposal which includes billions of dollars to stimulate the EV market . Credit Suisse analysts chose key EV-related stocks plus other energy assets that play into Biden's agenda — as well as worldwide energy trends — in a research note published Friday. Here are some of the analysts' top picks: Energy efficiency Texas Instruments , which makes EV components such as battery management systems, is on Credit Suisse's list of stocks with "above average" quality and momentum. Power company Cummins , whose new power division makes battery and fuel cell technologies, is also a pick, as well as Lear Corporation , which makes EV charging systems. The three assets are all rated "outperform" by the bank, suggesting they will produce better returns than the overall market. They appear in the bank's list of stocks under a transportation energy efficiency theme. Credit Suisse noted a clear trend toward regulation around carbon emissions coupled with falling prices and increasing innovation in EV components that it said would be "long-term growth drivers." Buildings Credit Suisse also chose stocks under a "building energy efficiency" theme, noting Biden's intention to revamp buildings – the U.S. administration announced plans to spend $300 million retrofitting buildings as part of its infrastructure package. Stock picks relating to building energy efficiency include engineering firms Emerson Electric , European firm Schneider Electric and certification company Bureau Veritas , all of which Credit Suisse rated as outperforming the market. Credit Suisse also chose stocks set to outperform under an industrial energy efficiency theme, with the sector showing "strong returns" year-to-date as well as in 2020, according to the bank. Automation and the use of internet of things technology are set to provide long-term growth, it added. Picks included Taiwanese firm Delta Electronics , Chinese firm Inovance and U.S. equipment-maker Woodward . ESG investing The stock picks form part of a wider research note on the growth of so-called ESG investing, which takes environmental, social and governance factors into account. "The popularity of ESG investing has grown exponentially during the past few years," the Credit Suisse analysts, led by Eugene Klerk, stated. "This trend will continue during the next few years driven by a 'pull' factor from end-investors and consumers and a 'push' factor in the form of tightening regulation," they added. Credit Suisse said its previous ESG picks had done better than the wider market.

This photo shows an electric car being charged on a street in London.

Miles Willis | Getty Images News | Getty Images

Credit Suisse has picked dozens of energy stocks with "high quality and momentum," including companies that make components for electric vehicles.

Investors have piled into EV-related stocks as the vehicles gain in popularity. Last month, U.S. President Joe Biden announced a $2 trillion infrastructure proposal which includes billions of dollars to stimulate the EV market.

Credit Suisse analysts chose key EV-related stocks plus other energy assets that play into Biden's agenda — as well as worldwide energy trends — in a research note published Friday.

Here are some of the analysts' top picks: