When it comes to investing, it’s all about valuation and timing. If you can find undervalued assets at the right time, you can make an absolute fortune.

Some assets are priceless because they are not easily replaced and offer few viable alternatives. Think about fine art, rare diamonds or vintage gold coins.

Now think about the irreplaceable roads, airports and railroads we use every day. How valuable are those assets?

One of the concerns the United States is currently facing is the growing need for improved infrastructure. It is a $2 trillion crisis no one is talking about. So when I think about long-term investments, infrastructure seems to be a safe bet.#-ad_banner-#

Infrastructure businesses often generate consistent, growing long-term cash flows. This is because the demand for the everyday services they provide exists in virtually every economic cycle. Also, those companies are often in sectors where there are high barriers to entry. They often own high-value physical assets that are difficult to replicate.

I also appreciate the fact that these businesses create revenues that are expected to keep pace with inflation. The price escalators built into agreements and the inflation and cost pass-through adjustments typically are a part of pricing terms that serve to insulate infrastructure businesses to a significant degree from inflation and commodity price risk.

While searching for infrastructure stocks, I found a company that owns, operates and invests in a diverse group of these businesses in the United States. This company owns the largest network of fixed-base operations on leased land at airports across the U.S., as well as a 50% stake in International-Matex Tank Terminals, an industry leader in the handling and storage of bulk liquid products.

The company I am referring to is Macquarie Infrastructure Co. (NYSE: MIC).

The real value here is the stock‘s dividend yield of nearly 5%. This dividend‘s growth potential is consistent with the fundamentals of each of Macquarie’s businesses. The company’s board of directors has indicated it will authorize the payment of a substantial majority of the cash generated by its businesses and investments as a quarterly dividend.

Macquarie is up more than tenfold since 2009:

In February, the company reported its 2012 results, showing 9.3% growth in proportionately combined free cash flow of $3.45 per share in 2012, compared with $3.16 in 2011. Macquarie also forecasts 13% growth in proportionately combined free cash flow for 2013.

Macquarie reported consolidated revenue of $1.03 billion for 2012, up 4.6% from 2011. The revenue growth primarily reflects increased sales volume and higher energy prices, such as for jet fuel and gas feedstock, which are typically passed on to customers.

One interesting recent development is Macquarie’s $9.4 million investment late last year in two solar power plants in partnership with Chevron Energy Solutions. The Arizona- and Texas-based facilities are capable of producing enough clean electricity to power 6,200 homes. The energy being produced has been sold to regional utilities for 20- and 25-year power purchase agreements.

Risks to consider: The stock currently carries a beta of 2.5, meaning it is two and a half times more volatile than the overall market. Case in point: In 2008, Macquarie shares lost more than 85% of their value — a loss that was followed by a gain of 225% in 2009. Additionally, infrastructure firms face significant political risk in North America, potentially affecting investment decisions. Additionally, with a forward price-to-earnings ratio of 48.3 and a price/earnings-to-growth ratio of 18.3, the stock’s valuation is unlikely to attract value investors.

Action to take –> Macquarie is a good buy up to $60 per share. With a yield close to 5%, this stock offers a great combination of growth and income. This stock could hit $70 within the next 12 to 18 months.

P.S. — Investing in “Irreplaceable Assets” is an idea first brought up in StreetAuthority’s Top Ten Stocks newsletter. Recently, chief strategist Elliott Gue has been telling readers about another idea called the “Dividend Vault”. Simply put, it’s the easiest way we know to collect thousands of dollars in dividends each month for the rest of your life. To learn more, click here.