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Brookfield Infrastructure Partners (BIP) Could Be a Great Choice
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Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Brookfield Infrastructure Partners in Focus
Headquartered in Hamilton, Brookfield Infrastructure Partners (BIP - Free Report) is a Finance stock that has seen a price change of 14.68% so far this year. The operator of utility, transportation and energy assets is currently shelling out a dividend of $0.38 per share, with a dividend yield of 4.3%. This compares to the REIT and Equity Trust - Other industry's yield of 4.58% and the S&P 500's yield of 1.74%.
In terms of dividend growth, the company's current annualized dividend of $1.53 is up 6.3% from last year. Brookfield Infrastructure Partners has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 3.08%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Brookfield Infrastructure's current payout ratio is 55%. This means it paid out 55% of its trailing 12-month EPS as dividend.
BIP is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $3.01 per share, which represents a year-over-year growth rate of 11.07%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. However, not all companies offer a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that BIP is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Brookfield Infrastructure Partners (BIP) Could Be a Great Choice
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Brookfield Infrastructure Partners in Focus
Headquartered in Hamilton, Brookfield Infrastructure Partners (BIP - Free Report) is a Finance stock that has seen a price change of 14.68% so far this year. The operator of utility, transportation and energy assets is currently shelling out a dividend of $0.38 per share, with a dividend yield of 4.3%. This compares to the REIT and Equity Trust - Other industry's yield of 4.58% and the S&P 500's yield of 1.74%.
In terms of dividend growth, the company's current annualized dividend of $1.53 is up 6.3% from last year. Brookfield Infrastructure Partners has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 3.08%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Brookfield Infrastructure's current payout ratio is 55%. This means it paid out 55% of its trailing 12-month EPS as dividend.
BIP is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $3.01 per share, which represents a year-over-year growth rate of 11.07%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. However, not all companies offer a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that BIP is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).