Canada stocks that may benefit from stimulus funds

By Susan Taylor

OTTAWA, Jan 8 (Reuters) - Canadian companies in sectors as diverse as technology and transit are poised to cash in on hundreds of billions of dollars of government economic stimulus spending around the world, analysts say.

Global infrastructure spending is expected to be used to tackle such issues as energy independence, the environment, and improvements to public transportation.

In the United States alone, President-elect Barack Obama pitched a tax cut and spending plan on Thursday that could cost nearly $800 billion and proposed investments in a range of sectors.

"It will take some time for this infrastructure spending to impact company results but investors should anticipate some impact by the end of 2009," Dundee Capital Markets analysts said in a recent research note.

"So how do we Canuck investors play this development?"

A group of Dundee analysts selected seven Canadian stocks it expects to benefit most from investments it sees being made in clean energy and building products, public transit, electricity grid modernization, and broadband telecommunications equipment.

Engineering and architecture firm Stantec Inc (STN.TO) has a range of green services that could see a surge in demand, said analyst Richard Stoneman.

Alongside its environmental group, which offers such services as site remediation, Stantec has a building division with broad experience in environmentally friendly construction, the analyst wrote.

Stantec's industrial group is a North American leader in the construction of wind farms and solar projects, while its transportation group is involved in big mass transit projects, he wrote.

Train maker Bombardier (BBDb.TO) is also well positioned, the analyst wrote, with a two-year order backlog as countries around the wold expand mass transit systems due to energy and environmental concerns.

"SWEET SPOT"

High tech company RuggedCom Inc (RCM.TO) is in "the sweet spot" for any spending plans on intelligent traffic systems, said analyst Arinder Mahal.

It makes networking equipment that helps electrical utilities modernize decades-old power grids. The company has close to 400 utilities as customers and is entering such emerging markets as China and India, Mahal wrote.

Analyst Ian Tharp said that Day4 Energy Inc's (DFE.TO) modest U.S. operations could get a jump start if that country's incentive plans make solar power installations more affordable. Currently Day4 sells the bulk of its solar modules into higher-priced European markets.

US Geothermal (HTM.A) (GTH.TO) may also benefit, Tharp said. The U.S.-based, Toronto-listed geothermal power developer has operating power plants and exploration projects.