Brookfield Infrastructure: A Reliable and Diversified Dividend Stock for the Future

I recently invested more in Brookfield Infrastructure Partners due to its reliable and growing distributions, diversified and stable underlying business, and solid growth opportunities. The company has a 16-year history of distribution increases with a CAGR of 9%, and its forward distribution yield stands at 5.67%. Its diversified infrastructure assets include transportation, utility, midstream energy, technology, and telecommunications businesses. Brookfield Infrastructure expects to continue growing its FFO per unit by a double-digit percentage in the future.

Brookfield Infrastructure Partners (BIP) has recently seen an increase in investment from a notable investor, who cited three key reasons for their decision. The company's reliable and growing distributions, diversified and stable underlying business, and solid growth opportunities make it an attractive option for investors.

Reliable and Growing Distributions

Brookfield Infrastructure Partners has a 16-year history of distribution increases, with a compound annual growth rate (CAGR) of 9%. The company's forward distribution yield currently stands at 5.67%. This reliable income stream is a significant draw for investors seeking stable returns. Although the investor does not currently rely on these distributions for income, they view the stock as a potential income generator for the future.

Diversified and Stable Underlying Business

Brookfield Infrastructure Partners' diversified infrastructure assets include transportation, utility, midstream energy, technology, and telecommunications businesses. This diversification helps mitigate risks associated with economic uncertainty, such as the impact of tariffs. The company's transportation business, which generates around 41% of its funds from operations (FFO), operates across multiple continents, including Australia, Brazil, Europe, North America, and the U.K. Additionally, Brookfield Infrastructure has significant utility operations, with gas pipelines and electricity transmission lines contributing to 25% of its FFO.

Solid Growth Opportunities

Brookfield Infrastructure Partners has a strong track record of growth, with an FFO per unit CAGR of 14% since 2009. The company expects to continue this growth trajectory, driven by trends such as digitalization, decarbonization, and deglobalization. Digitalization, in particular, presents significant opportunities for growth in data infrastructure, which currently accounts for nearly three-quarters of the company's capital backlog.

Conclusion

Brookfield Infrastructure Partners offers investors a combination of reliable distributions, a diversified and stable business, and robust growth prospects. While the stock has not been a significant winner for some investors in the past, the recent increase in investment reflects a positive outlook on the company's future performance. Investors should consider these factors when evaluating the stock's potential.

References

[1] https://finance.yahoo.com/news/why-just-bought-more-ultra-084400111.html
[2] https://www.nasdaq.com/articles/why-i-just-bought-more-ultra-high-yield-dividend-stock