Dennis Mitchell, CFA

Because it provides such an essential service, the great thing about infrastructure is that the demand is relatively inelastic. Whether GDP growth is +2 or +4, or -2 or -4, we're all going to continue to use roughly the same amount of water, electricity, and so on. (In fact, if GDP growth is negative, we actually might spend more time on the internet.)

You want to be a long-term investor, but you want to be very strategic when you enter. These businesses tend to have long-term, contractual cashflows. The outlook is very predictable. Pick your entry point very tactically so you can maximize the compounding of total returns.

If infrastructure stocks sell off because interest rates and oil prices are going up, that's the time to pounce.

Engineering, procurement, and construction (EPC). Focus is where you want to be -- clean energy, infrastructure, power delivery, communications, some pipelines. Challenge is legacy communications business, with margins lower and revenue guidance cut. Plus concerns about hyperscaler capex.

Good business operationally. Backlog has grown tremendously. Guidance for EPS growth is 40%. Significant implied upside by analysts. Be cautious and leg in, keep it to a smaller weight.

Independent power producer. Huge in Alberta, some in US and Ontario. Diversified -- renewables, solar, gas. Announced project for META. Alberta's trying to turn itself into a data centre hub. Significant excess power. On paper, looks great.

In the short term, exposed to a market that's oversupplied. Annualized total return of 13-15%. Decent valuation. Keep an eye on it -- one to buy as more data centre announcements made. Attractive yield of 4-5%.

Liquid pipelines business, with some gas transmission in midstream (that's where the upside is). Provides 20% of US gas consumption, and 25% of feed gas for LNG exports. Those 2 industries seeing tremendous growth. Rising global demand for LNG, and NA will supply that with ENB perfectly positioned. Likes it here, he'd buy.

Overhang: Line 5 mishap with negligible environmental impact, but Michigan's trying to shut it down. Odds of that are pretty low. ENB will have to spend $$ on this and pay fines.

Excellent business. Independent power producer. Hydro, wind, solar. Huge footprint -- NA, SA, Europe, Asia. Nuclear, too. Likes partnering with hyperscalers -- captive projects that will grow its pipeline. Simplified corporate structure will allow index inclusion, should result in stock pop.

5-9% annual distribution growth, driven by 10% FFO growth. Don't look at earnings metric for this company; instead, look at FFO. Yield is ~5%. That makes it ~10-12% annual return. Trades ~13x PE.

His team is researching whether to add. If bond yields rise, names like this tend to be punished. Leg in, as you may get your chance to buy cheaper.

Engineering, procurement, construction. Better alternatives out there to benefit from electrification demand and AI buildout. If you own, no reason to sell. See his Top Picks.

His definition of a super-cycle is when you have multi-trillions of dollars of investment happening over multiple decades. His team identified 5 global themes that will drive performance and cashflow in a portfolio.

Digital infrastructure and financial networks -- captures AI, plus innovation in financial networks. Cell towers, data centres, stock exchanges, payment networks. 

Power generation and power demand -- AI, electrification, battery storage.

Energy transition -- mainly about the planet needing more energy from all sources.

Transportation, logistics, and trade -- US trade policy has forced companies to relocate plants away from China, which increases demand for infrastructure to support that manufacturing. Ports, roads, bridges, power plants, logistics real estate.

Infrastructure renewal -- bridges, ports, and airports need to be refreshed and upgraded. US infrastructure earned an average grade of C+ this year, with some assets earning a D. That super-cycle alone is $94T between now and 2050.

None today.

One of the best mid-streamers in Canada. Gathers and processes raw gas, processes it to remove water, and resulting gases feed a number of industries. Marketing business brings a bit of commodity risk. Facilities are integrated and inter-connected. More demand for gas drives volumes and revenue. Huge shortage of condensate, and it's built its own network to support production. 12-15% annualized returns. Loves it. 

Component failure and outage at Envirofuels causing investors trepidation. Yield is ~4%.

(Disclaimer:  Special place in his heart. Two of the board members were very kind to him when he was breaking into the business 20 years ago, and taught him everything he knows about energy and midstream.)

Not a huge fan. EBITDA's down, cut dividend, cut guidance. Leverage still elevated. Attempting to pivot -- acquisition in fibre, building data centre. Trades at a discount. Buying today would probably give you ~20-25% upside. Not a great business overall, pricing wars impact whole industry. 

Better choices elsewhere for income.

Big fan. One-stop diversified infrastructure play. Big growth driver is data -- cell towers, fibre, data centres -- now ~36% of FFO, but growing at a faster clip than other divisions. Simplifying structure, eligible for index inclusion, price may pop. 6-9%  internal growth (he sees 9-12% for next couple of years). Trades at only 10x FFO. 

Definitely buy at this level, looking at north of 25% total return. Increased interest rates will cause price volatility. Yield is ~5%.

With Starlink, you'd have to buy a special phone that allows you to connect to the satellite network. Actively competing in US, with plans to come into Canada.

Challenge is that high-speed fibre and the land-based cell tower network will always be superior to satellite due to line-of-sight and distance issues. The lag differential is about 10:1. Cost of launching satellites is pretty expensive compared to building cell towers.

It's nice to have competition, but this won't be robust competition. Elon Musk himself says satellites will never be able to replace the terrestrial tower network.

He's very bullish on waste collection. Not his only holding. Pricing is up ~6%, but volumes are flat. So topline growth is 6%. Margins have expanded to near 30%. Leverage decent, could be lower. Two competing offers for it, takeover premium's not quite reflected in the stock.

If you own, hold on till there's a resolution. If looking to add on merits of its organic business, he sees high teens to low 20s in total return from here.

Engineering, procurement, construction (EPC). Excellent exposure to industrials, oil sands, mining, energy. Data centre buildings. Utilities and civil buildings are its infrastructure focus. Nuclear exposure. Do you want exposure to these areas? Absolutely yes.

Massive increase (80%) in backlog has turbocharged the stock. You want to see consistent revenue growth, but also a backlog of projects to replace that revenue. Backlog has potential for significant EBITDA margin expansion. Recently earned investment-grade rating.

Pretty expensive, don't add here. Wait for at least a 10% pullback before legging in. Great business. Rapid transformation, up 191% YTD.