2 Brilliant Growth Stocks to Buy Now and Hold for the Long Term

In today's investment landscape, it's crucial to focus on companies that generate stable profits and cash flows, rather than speculative ventures like AI. Two standout growth stocks that align with this approach are Brookfield Infrastructure (BIPC) and Constellation Energy (CEG). Both companies offer robust growth potential, attractive valuations, and compelling dividend growth prospects.
Brookfield Infrastructure is a global leader in infrastructure investments, with a diversified portfolio spanning utilities, midstream, transportation, and data infrastructure. Its data infrastructure platform, including data centers and telecom towers, benefits from surging demand for computing power and data transmission. Additionally, its utilities and midstream assets, such as natural gas pipelines, profit from growing power demand and lower-carbon trends.
Brookfield Infrastructure's acquisition strategy has been pivotal in driving its earnings growth and dividend expansion. Since 2015, the company has completed over 200 acquisitions, focusing on building geographic density and reinforcing its market share leadership. This strategy has delivered a durable cost advantage for its pest-control business, as seen in the 34% discount of its stock price to Morningstar's fair value estimate of $39.50 per share. Furthermore, Brookfield's capital allocation rating is exemplary, indicating smart decision-making in mergers and acquisitions, which has further enhanced its earnings growth and dividend expansion potential.

Constellation Energy, the country's largest clean power producer, is another compelling growth stock. Its robust growth outlook is driven by its leading nuclear power fleet and growing renewable energy portfolio. Nuclear power provides stable, low-carbon energy, while renewable energy sources like wind and solar offer long-term growth potential. The company's power purchase agreements with utilities and corporate customers ensure a steady revenue stream, with earnings per share expected to grow by more than 10% annually through 2028. Additionally, Constellation Energy aims to increase its dividend by about 10% annually, further enhancing its long-term appeal for investors.
Constellation Energy's power purchase agreements and strategic partnerships, such as the deal with Microsoft, significantly bolster its future growth prospects. PPAs provide long-term revenue visibility, with the Microsoft deal alone expected to generate $100 million annually. This deal also supports Constellation's nuclear energy growth strategy, with the restart of a nuclear-generating unit slated for 2028. These agreements and partnerships enable Constellation to maintain a robust growth outlook, with projected earnings per share growth of over 10% through 2028.

Both Brookfield Infrastructure and Constellation Energy are currently trading at attractive valuations, with BIPC at 0.47 and CEG at 0.92 of their intrinsic values, according to Morningstar. This undervaluation can be attributed to market perceptions of high interest rates affecting REITs and the perception of AI as a growth sector. However, these companies' strong fundamentals, long-term contracts, and inflation-protected revenues make them attractive investments for the long term.
In conclusion, Brookfield Infrastructure and Constellation Energy are two brilliant growth stocks to buy now and hold for the long term. Their robust growth prospects, attractive valuations, and compelling dividend growth potential make them ideal investments for income-focused portfolios. As the global economy continues to evolve, these companies' stable cash flows and adaptable business models position them well for future success.