Opinions
James Telfser
Brookfield Infrastructure Partners
BIP.UN-T
BUY
Jul 25, 2024
Stock price when the opinion was issued
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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.
Pretty darn defensive. Firing on all cylinders. Monetizing with 2 recent sales. Evidence of capital recycling. Announced 15% stake in Colonial Pipeline in TX. Counter-cyclical; buys assets in bad markets. Real, inflation-linked revenues. Excellent growth outlook. Much more diversified than in years past.
Reasonable 9x price to AFFO, growing ~12.6%. Good value right here. Yield is 6.20%, which he sees rising ~6% every year.
Bit of a ride. One of his largest positions across portfolios. Assets are world class, not going anywhere, generating tons of free cashflow. Also hard to purchase, so there's a scarcity value there. In this environment where interest rates are on the decline, it should benefit from closing the gap to what underlying assets trade at.
Likes the way they're not afraid to sell assets and recycle profits into another area that they see as having more potential. Pivoting into areas like pipelines and data centres that should benefit them for years to come. Still extremely cheap valuation. Hopefully we're in for some better years.