At Extreme Investor Network, we pride ourselves on providing valuable insights and information to help you make informed decisions about your investments. As an expert in all things finance, we understand the importance of finding high-quality, high-yielding dividend stocks to grow your passive income streams. One of our top picks in the income stock category is Brookfield Infrastructure (NYSE: BIP)(NYSE: BIPC), a leading global infrastructure operator that continues to impress us with its rock-solid income stream.
Brookfield Infrastructure operates a diversified portfolio of infrastructure businesses, generating stable cash flow from utilities, transport, midstream, and data infrastructure assets. With 90% of earnings coming from long-term, fee-based contracts or government-regulated rate structures, the company offers a reliable income stream with an average remaining term of 10 years. In addition, a significant portion of its cash flow is protected from inflation, ensuring consistent returns for investors.
What sets Brookfield Infrastructure apart is its commitment to paying out 60% to 70% of its stable cash flow in dividends each year, resulting in a dividend yield of over 5.5%, significantly higher than the S&P 500’s average yield. Furthermore, the company maintains a strong balance sheet with a solid investment-grade credit rating, long-term fixed-rate debt, and ample liquidity. By recycling capital and investing strategically, Brookfield Infrastructure ensures the sustainability of its high-yielding dividend.
Looking ahead, Brookfield Infrastructure has a promising growth trajectory, having increased its dividend every year since going public in 2009. The company aims for 5% to 9% annual dividend growth, supported by robust organic growth drivers such as inflation-indexed rate increases, volume growth, and a backlog of expansion projects. Additionally, its capital recycling strategy enables double-digit growth in funds from operations (FFO) by selling mature assets and reinvesting in higher-return investments.
Despite its impressive track record and growth prospects, Brookfield Infrastructure remains attractively priced, trading at less than 10 times its FFO per share. With the S&P 500 trading at a forward P/E ratio of around 21.5 times, Brookfield Infrastructure’s valuation presents a rare opportunity for investors seeking income and growth at a bargain price.
In conclusion, Brookfield Infrastructure checks all the boxes for income investors, offering a high dividend yield, steady growth, and a compelling valuation. As passionate income investors ourselves, we continue to add to our position in this income juggernaut and believe it’s a solid choice for investors looking to build a strong passive income stream. Stay tuned to Extreme Investor Network for more insights and recommendations on income-generating investment opportunities like Brookfield Infrastructure.