With a bipartisan infrastructure bill and a $3.5 trillion budget resolution making their way through Congress and looking poised to pass, I believe investors are greatly underestimating the extent to which these pieces of legislation will help General Electric (NYSE:GE) and GE stock.

GE operates through four industrial segments — Power, Renewable Energy, Aviation and Healthcare — and a financial segment. Assuming the bills end up passing, the company’s Power, Healthcare and Renewable Energy businesses should benefit meaningfully. This, in turn, should boost GE stock.

Let’s take a look at the ways the company and its shareholders could be aided by the legislation.

GE Power

As I’ve reported previously, a veteran analyst has told Utility Dive that the budget is likely to include “a ‘direct pay’ revision that would allow tax credits to be used like cash by utilities and others without any tax liability, such as public power utilities.”

Such a provision would likely meaningfully accelerate spending by electric utilities on new equipment, upgrades to power plants, and even new power plants themselves. That development, in turn, would greatly boost the results of GE’s Power unit, which is one of the nation’s top sellers of equipment for power plants.

Also likely to increase spending on power plants is the proliferation of electric vehicles and electric-vehicle charging stations.  The budget will probably include expanded tax credits for EVs, while the infrastructure bill allocates $7.5 billion for building new EV charging stations and $5 billion for electric and low-emissions buses.

States are getting in on the action as well. In July, California Governor Gavin Newsom signed an emergency proclamation to expedite clean energy projects. The proclamation included actions “to accelerate the state’s transition to clean electricity by streamlining permitting and other processes to bring new resources on-line as fast as possible this summer and by next summer.” As one example, California is already adding “five temporary gas-fueled generators” this summer.

The Golden State is also the leading state for EVs. As EV penetration surges, while coal continues to be phased out, California will become even hungrier for new electricity, and other states are likely to rapidly add renewable and natural gas power plants, greatly boosting the financial results of GE’s Power unit.  A similar phenomenon is likely to take hold in Europe, China, and other regions that are quickly switching to EVs.

GE Healthcare

The GE Healthcare segment sells health care products and technologies to hospitals and medical facilities around the world. These include diagnostics test equipment, ventilators, monitoring solutions and x-ray systems.

Using the budget bill, Democrats are hoping to lower the eligibility age for Medicare from the current age of 65. Some, including President Joe Biden, have said they support lowering the eligibility age to 60.

It’s far from certain that this proposal will make it through Congress. But if it does, I expect many more diagnostic health care tests to be ordered by American hospitals, lifting the demand for the testing equipment sold by the GE Healthcare unit.

GE Renewable Energy

Democrats reportedly plan to include a “clean electricity standard” in the budget that the party hopes will result in 80% of U.S. electricity being generated by “clean energy” within the next decade. They also intend to extend tax credits for renewable energy, including wind power, for a decade.

As a leading form of clean energy, wind power should be a huge beneficiary of that move. And as a leading producer of both onshore and offshore wind turbines, GE’s Renewable Energy unit should get a big boost from the proliferation of wind power in the U.S.

What’s more, GE’s Grid Solutions business is now a part of the conglomerate’s Renewable Energy unit. The grid business includes microgrids, energy storage systems and transformer protection products.

All of these offerings are likely to generate meaningfully increased sales due to the infrastructure bill, which includes billions of dollars “towards new power lines, rebuilding America’s old electric grids and expanding clean energy.”  Also likely to help GE’s Grid business is the budget bill, which is expected to feature a new tax credit for energy storage, as well as the “direct pay” provision that I described earlier.

The Bottom Line on GE Stock

Together the infrastructure and budget bills should meaningfully lift all of GE’s main businesses, except for Aviation. But Aviation is likely to be helped by the money that will be put into American consumers’ pockets due to the new jobs created by these bills. I also expect Aviation to be boosted in the coming weeks by increased vaccination totals around the world, as more people look to travel.

Despite all these positive catalysts, GE stock is trading about 8% below its 12-month high, made in March.

I believe the Street is greatly underestimating the strength of the company’s positive catalysts and recommend that medium-term and long-term investors buy GE stock.

On the date of publication, Larry Ramer held a long position in GE stock. 

Larry Ramer has conducted research and written articles on U.S. stocks for 13 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been GE, solar stocks, and Snap. You can reach him on StockTwits at @larryramer.