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Why Brookfield Infrastructure Partners (BIP) is a Top Dividend Stock for Your Portfolio
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All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a 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
Brookfield Infrastructure Partners (BIP - Free Report) is headquartered in Hamilton, and is in the Finance sector. The stock has seen a price change of 3.31% since the start of the year. The operator of utility, transportation and energy assets is paying out a dividend of $0.36 per share at the moment, with a dividend yield of 3.44% compared to the REIT and Equity Trust - Other industry's yield of 3.57% and the S&P 500's yield of 1.58%.
In terms of dividend growth, the company's current annualized dividend of $1.44 is up 5.9% 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 3.44%. 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 56%. This means it paid out 56% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for BIP for this fiscal year. The Zacks Consensus Estimate for 2022 is $2.69 per share, with earnings expected to increase 10.70% from the year ago period.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. But, not every company offers a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, BIP is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).
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Why Brookfield Infrastructure Partners (BIP) is a Top Dividend Stock for Your Portfolio
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a 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
Brookfield Infrastructure Partners (BIP - Free Report) is headquartered in Hamilton, and is in the Finance sector. The stock has seen a price change of 3.31% since the start of the year. The operator of utility, transportation and energy assets is paying out a dividend of $0.36 per share at the moment, with a dividend yield of 3.44% compared to the REIT and Equity Trust - Other industry's yield of 3.57% and the S&P 500's yield of 1.58%.
In terms of dividend growth, the company's current annualized dividend of $1.44 is up 5.9% 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 3.44%. 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 56%. This means it paid out 56% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for BIP for this fiscal year. The Zacks Consensus Estimate for 2022 is $2.69 per share, with earnings expected to increase 10.70% from the year ago period.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. But, not every company offers a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, BIP is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).