Opinions
Barry Schwartz
Brookfield Infrastructure Partners
BIP.UN-T
PAST TOP PICK
Dec 20, 2016
Stock price when the opinion was issued
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Likes the business and the story. Grows globally. Buys large, long-term strategic assets. Likes the way they structure their debt. Could do very well in this environment. Caught up a bit in the tariff noise. Buy assets, improve, sell at a premium, repeat. Capital intensive; as rates come down, value of assets should go up.
Disclaimer: Pretty tight with the CEO and some of the management team.
The closer you are to the top of the house in the Brookfield framework, the closer you are to the CEO and the Board, and the incentive structures tend to favour them. Doesn't have the great yield, but has upside. BAM offers you the yield and, broadly speaking, growth aspects. He'd encourage you to stay near the top of the house, depending on how much yield you need for your life circumstances.
For BIP.UN, it's not really whether Mark Carney got elected or not, or tariffs, because it's a global business. Infrastructure, toll roads, coal, etc. Very diversified.
Has a global footprint. If you have a TFSA or RRSP, you can buy the partnership units and receive the same dividend as on the corporate units but at a 25% discount--a good value in those accounts. Good dividend growth ahead, paying 5.59% now.
(Analysts’ price target is $54.90)Surprised it hasn't done better. Still, happy to continue owning. Stock may be off on questions whether assets can still be sold at a premium in a weakening economy. So far, yes. Yield plus growth. Almost 6% yield, and growing.
Came out of it last December after the election on concerns of a global economy challenged by tariff policies. Riding coattails of general market recovery over last few weeks. Still well positioned down the road for global clean energy, but not right now.
This is today's pick for income investors. Very inexpensive valuation, less than 10x FFO. Very strong dividend yield. Global platform, diversified infrastructure footprint -- rail, storage, utilities, data, energy, midstream infrastructure. Opportunity for significant earnings growth over the medium term, plus opportunity for significant multiple expansion. Cashflow is great.
May have been suppressed because of sluggish deal activity, but that's starting to pick up. Yield is 5.35%.
There has been a pullback so this is good entry point. Business is good and the last quarter beat expectations. It is constantly putting money to work. The stock yields 5.5%. It is a steady compounder and she sees good upside potential. Buy 8 Hold 3 Sell 0
(Analysts’ price target is $56.31)
(A Top Pick Jan 28/16. Up 43%.) They’ve been very active in 2016. Have been buying toll roads, cell towers, as well as cell towers in Brazil. There was an 11% distribution increase in 2016, and probably should expect more in 2017. Pretty much the only infrastructure company you can buy in Canada, with such diversified assets. Not cheap, but there is a moat around that kind of business. The scarcity value of the assets make it attractive. He would look to buy this on pullbacks.