ABB had a tough couple of years in 2014 and 2015, when revenue declined and profits dropped $854 million, prompting the stock price to plummet 41%. But after adding two major contracts this year, ABB’s infrastructure business, one of its main sources of revenue, is finally looking up. Since Jan. 1 ABB shares, which yield 3.6%, have snapped back 18%.

Switzerland-based ABB (NYSE: ABB) is mainly an automation, robotics and power grid company. With countries around the world slow to recover from the economic crisis, infrastructure spending suffered. But now analysts are forecasting spending increases of 3% to 6% per year on vital projects such as roads, communication towers and power grids. According to a report by PwC and Oxford Economics, $4 trillion was spent on infrastructure in 2012, and that will rise to more than $9 trillion per year by 2025.

Infrastructure spending will increase in both developed and developing countries, with the latter juicing up ABB sales. About 37% of its 2015 sales came from emerging markets in Asia, the Middle East and Africa. A rising middle class in China and India, though, will drive infrastructure spending the most over the next decade.

China is a major market for ABB because a rural population migrating into cities puts pressure on the country’s urban infrastructure. With the country’s ongoing economic turmoil, demand from the Chinese government, slowed, so CEO Ulrich Spiesshofer redirected ABB’s sales efforts toward factory robots for private Chinese car and electronics makers. 

Infrastructure also matters in India, where cities will add 500 million people over the next four decades. Helping guide the company in that country is new board member Satish Pai, deputy managing director of one of India’s largest aluminum product makers.

In developed countries that are still burdened with debt from the crisis, spending will lag, but it should increase slowly in Europe, reaching pre-crisis levels by 2018. Most sectors in North America had hit those levels by 2014, and ABB expects further spending to come from oil and natural gas extraction, as well as telecommunications.

In Europe, green technology will be key. The Paris Agreement of the United Nations Framework Convention on Climate Change requires signing nations, many of them European, to devise a plan for reducing
emissions and using more renewables and biofuels by 2020. As a result, renewable power will account for most new infrastructure spending in France, the United Kingdom and Sweden over the next decade.

Last April, ABB launched YuMi, the first two-arm factory robot designed to work safely alongside humans. At a relatively low cost of about $40,000 per robot, YuMi is ideally priced for Chinese and Indian manufacturers that are beginning to automate their factories.

Then last month ABB landed a five-year contract to provide generators, motors, switches and breakers for Shell’s floating liquefied natural gas facility, the world’s first offshore. This month Dong Energy awarded ABB a $250 million contract for high-voltage cables to connect the U.K.’s mainland power grid to a wind farm in the North Sea.

With ABB’s turnaround already evident in its revenue, higher earnings will follow. Earnings per share (EPS) will edge up to 95 cents this year from 94 cents in 2015, but analysts predict a huge gain next year—up to $1.16 per share. Meanwhile, ABB stock trades at a discounted price-to-sales ratio of 1.2 compared to the electrical equipment industry average of 1.6.

Even with low oil prices decreasing demand for ABB products from the company’s oil and gas customers, fourth-quarter 2015 EPS was still 35 cents, beating expectations by 13 cents, or about 59%. With 2015 free cash flow of $2.98 billion and a dividend payout ratio of 88%, ABB should offer excellent income for many years.

Buy ABB up to $30.