If you’re looking for global reach in essential industries with as little risk as possible yet plenty of growth and good value for money with a chunky dividend to boot, some people may tell you that you’re just being greedy. However, a portfolio manager might tell you that with Brookfield Infrastructure Partners (TSX:BIP.UN)(NYSE:BIP), you’ve come to the right place.
With a focus on long-term assets essential to the smooth running of a nation, Brookfield Infrastructure Partners takes the point of view that investors deserve to be rewarded. By carefully tending its portfolio of worldwide assets, it’s grown its share price by four times its original cost 10 years ago and currently pays a modest dividend that yields 3.28% at today’s price of $57.35 a pop.
It’s buying up and developing core assets in sectors spanning energy and transportation as well as water, data, and freight. That’s quite the mix and offers a satisfyingly diverse spread of industries to a passive-income portfolio with just one investment. While the dividend yield may be low, this kind of spread-out exposure across countries and sectors means that your investment is about as safe as global civilization.
Access to infrastructure, but also canny management
Buying and selling is key to this company. Unlike other trust-type setups, Brookfield Infrastructure Partners buys low, develops, and sells high. This way, it creates value not only for the projects it flips, but also for shareholders. Recent sales include a toll road company in Chile and interest in ports in Europe. In short, by investing in this stock, what you’re really buying is access to savvy investment managers.
In terms of acquisitions, Brookfield Infrastructure Partners just snapped up Genesee & Wyoming, a railroad holding company with assets spanning 120 railroads in Canada, the U.S., Australia, Belgium, the Netherlands, Poland and the U.K. In total, this adds to Brookfield Infrastructure Partners’s existing rail assets a huge 26,000 km of track and around 3,000 customers in new territories and solidifies its position in the international rail market.
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A buy-and-forget stock for long-term investment
Transactions like these illustrate Brookfield Infrastructure Partners’s expertise in deal-making and an understanding of its own asset base. Tying together pre-existing Australian and Brazilian rail assets with its purchase of Genesee & Wyoming is a canny move. There are clear synergies with these other international rail assets, meaning that an entire industry across different countries can be managed in a coordinated and profitable manner.
In energy, too, Brookfield Infrastructure Partners exhibits a keen eye for high-quality bargains in assured markets. Take natural gas, for instance. By focusing on geographical regions with sharply rising demand, Brookfield Infrastructure Partners corners the market, develops assets, and feeds back profits to shareholders. Wealth creation in markets from India to Mexico and Australia will help keep investors covered for the lifetime of their investment.
The bottom line
If you’re looking for a company that can confidently harness market forces to protect and grow your investment, Brookfield Infrastructure Partners is an excellent option. While its yield may not be stratospheric, what you’d be getting here is a steady, low-maintenance addition to a passive-income portfolio that you can buy once and forget about.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Victoria Hetherington has no position in any of the stocks mentioned. Brookfield Infrastructure Partners is a recommendation of Stock Advisor Canada.