This 4% Dividend-Yielding Share Representing a Top Investment Option for Generating Income and Potential Gains Through 2025 and Beyond
Brookfield Infrastructure Partners (BIPC) boasts an alluring investment proposition for investors. As a leading global infrastructure operator, it promises a substantial dividend, surpassing 4% yield, and robust growth, exceeding 10% annually.
These twin motivators set the stage for the infrastructure firm to carry on generating remarkable total returns in 2025 and beyond. Thus, it emerges as an appealing choice for income and growth as we enter the new year.
Stable income source
Over the years, Brookfield Infrastructure has demonstrated its excellence in income generation. The company has persistently hiked its dividend since its public debut (spanning 15 years). This division increase has occurred at a steady 9% compound annual rate throughout this duration.
Brookfield Infrastructure's lucrative dividend rests on a solid foundation. The company's diverse array of utility, energy midstream, transportation, and data infrastructure sectors consistently delivers consistent cash flow. Approximately 85% of its Funds from Operations (FFO) stems from contracted or regulated assets. Moreover, 85% of this cash flow is shielded from or indexed to inflation.
Brookfield retains around 30-40% of its steady cash flow for reinvestment in new infrastructure projects. It maintains a well-rated investment-grade balance sheet and maintains substantial liquidity, frequently replenishing it through capital recycling.
Prolific growth prospects
On track to increase its FFO per share by more than 10% once again in 2022, Brookfield Infrastructure has proven itself an impressive growth engine. Since its inception in 2009, it has reported a compound annual FFO per-share growth of 15%. The company anticipates delivering double-digit FFO per-share growth in 2025 and beyond.
Brookfield's organic growth potential remains robust, driven by inflation-linked rate increases, global economic expansion, and reinvested cash flow in development projects. The company anticipates achieving 6-9% annual FFO per-share growth through these means. Presently, Brookfield has a record-setting backlog of organic growth projects valued at $8 billion, and another $4 billion of projects currently under development.
Brookfield's ability to recycle capital by offloading mature assets to finance high-yielding new investments has historically fueled double-digit growth. Currently, its investment pipeline is as substantial as it has been in two years and continues to expand.
The company anticipates flourishing growth opportunities in the coming years, both organically and through acquisitions. It estimates that the world will need to invest $100 trillion to maintain, modernize, and build infrastructure throughout the next 15 years, including $8 trillion for AI-related infrastructure over the next three to five years. Brookfield intends to claim a suitable share of this massive venture.
Appealing valuation
Trading substantially below $40 at present, Brookfield Infrastructure's share price equates to approximately 12 times its FFO. In comparison, the broader market boasts a forward P/E ratio of more than 22 times. Brookfield's lower valuation contributes to its higher relative yield (the S&P 500 yields approximately 1.2%).
Potent total return opportunities
Brookfield Infrastructure presents an alluring investment opportunity at present. Its generous dividend, slated for consistent growth, coupled with its strong growth prospects and an attractive valuation, positions it to deliver robust total returns in 2025 and beyond. In light of this, considering an investment in Brookfield Infrastructure is highly advisable.
Given the text, here are the two sentences containing the words 'money', 'finance', and 'investing':
Investors seeking both income and growth prospects might find 'money' in Brookfield Infrastructure's shares, as its lucrative dividend, robust growth, and attractive valuation position it for potent 'total return opportunities'.
Brookfield Infrastructure's focus on finance and 'investing' in infrastructure projects has led to a diverse portfolio of assets, generating consistent cash flow that supports its generous dividend and strong growth potential.
