Opinions
Zachary Curry 
Brookfield Infrastructure Partners
BIP.UN-T
BUY
Jun 04, 2024
Stock price when the opinion was issued
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Infrastructure stocks have had a good lift over the last 3 months, as have utilities. Yield is 3.6%, and only growing 5-6%. He likes more dividend growth, usually north of 10%. You won't get hurt, but performance might be less than the market.
He prefers the infrastructure builders to the owners. Lots of $$ being spent building infrastructure, and a bit more leverage in the earnings.
Always likes to have a pick for people looking for income. Gives you a bit of opportunity for growth and income for a very long time. Very diversified, global. Payout ratio is quite reasonable, so a safety play for income. Yield is 4.6%.
(Analysts’ price target is $52.06)Q3 banged out another 7% YOY. Inflation-linked revenues. Deal pipeline continues to grow. Hit capital recycling targets for 2024. Modelling 15% AFFO growth rate, yet trading at 9.68%. Still likes it, thinks it'll go higher. Yield is 5%.
Just beat by 5%. Strong momentum in its segments. Inflation-linked revenues. Large organic pipeline, robust deal-making. Company's bullish about data growth. His estimates show it growing 11%, and trading at 10x. Fairly priced, nice compounder, dividend grows 6% annually. Yield is 5.4%.
Good US assets, Brookfield management is innovative. Business operations are very strong long term, not affected by short-term tariffs. Now, if tariffs are imposed for the long game, there's almost no name that would be unscathed.
Announced 2 asset sales, gives them a lot of dry powder. Last quarter beat by ~5%; showed strength in midstream, utilities, data, and transport. Boosted distribution by 6%. Inflation-linked revenues. Large backlog. Data centre growth is a great piece of growth. Trades at 8.5x 2027 AFFO, modeling ~11% growth. Yield is 5.8%.
(Analysts’ price target is $57.86)Management's doing what they said they would. It's a yield + growth play. Not sure why it's not performing as well as other utilities. Capital recyclers, and perhaps market prefers using capital for buy-and-hold projects. But they continue to execute their strategy well.
BIP is more sensitive to interest rates, and will constrained when rates rose. Also, they pay a dividend which was competing with high rates. As rates decline, this will benefit BIP and encourage more building projects. In contrast, BEP is a tougher go, because the transition to renewables will take longer than many expect. But BEP is best in class and its managers are fantastic. BEP's use of AI (with Microsoft) will benefit the stock, but we're ahead of ourselves.