Now with an article like this, the ending of the story is pretty much in the headline. It’s like reading the last page of a book without going through the entire story. The thing is, it’s how you get to the end of the story that matters. And why you should read it in the first place.
That’s what I want to demonstrate here. The stock I’m going to discuss is a strong choice for a number of reasons. And it’s stable. That’s why it’s a company that likely will reach this amount over the next several years.
So today, let’s look at why Brookfield Infrastructure Partners LP (TSX:BIP.UN) is a great choice on the TSX today.
Infrastructure is necessary
I mean this literally. We don’t survive without infrastructure. Whether it’s the roads we need to get to work, or the water that comes through our taps, infrastructure is behind it. However, there are also growing industries within this field as well.
With that in mind, a company like BIP stock is a great choice for during a recession, after a recession, and for decades to come. You can be certain the company will continue to grow thanks to the essential services provided by infrastructure. You can also be sure it will be around for decades because it’s backed by a major parent company.
In fact, BIP stock should continue to do well for the foreseeable future, and even see major growth with the rise of interest rates. It can therefore charge higher prices and lock in interest rates with its partners at higher costs as well.
Steady cash means steady growth
With BIP stock you can therefore look forward to a steady flow of cash coming in for decades. Its long-term contracts allow for income that won’t disappear overnight, even should shares drop in the next few months because of a recession.
That’s why it’s always a good time to pick up the stock if you’re hoping to hold long term. Who cares if it’s a steal now if you’ll have insane growth over the next several years?
With that in mind, let’s finally get to the math behind what that $10,000 investment could get you.
| Year | Shares Owned | Annual Dividend Per Share | Annual Dividend | Compound Frequency | After DRIP Value | Year End Shares Owned | Year End Stock Price | New Balance |
|---|---|---|---|---|---|---|---|---|
| 1 | 226.00 | C$2.04 | C$460.92 | quarterly | C$10,467.19 | 235.30 | C$50.43 | C$11,866.94 |
| 2 | 235.30 | C$2.26 | C$531.28 | quarterly | C$12,407.21 | 244.70 | C$57.49 | C$14,068.58 |
| 3 | 244.70 | C$2.50 | C$611.67 | quarterly | C$14,690.29 | 254.18 | C$65.54 | C$16,659.89 |
| 4 | 254.18 | C$2.77 | C$703.43 | quarterly | C$17,374.53 | 263.74 | C$74.72 | C$19,706.92 |
| 5 | 263.74 | C$3.06 | C$808.07 | quarterly | C$20,527.50 | 273.38 | C$85.18 | C$23,286.47 |
| 6 | 273.38 | C$3.39 | C$927.29 | quarterly | C$24,227.69 | 283.07 | C$97.11 | C$27,487.80 |
| 7 | 283.07 | C$3.76 | C$1,063.00 | quarterly | C$28,566.31 | 292.81 | C$110.70 | C$32,414.60 |
| 8 | 292.81 | C$4.16 | C$1,217.35 | quarterly | C$33,649.21 | 302.60 | C$126.20 | C$38,187.25 |
| 9 | 302.60 | C$4.60 | C$1,392.76 | quarterly | C$39,599.17 | 312.41 | C$143.87 | C$44,945.39 |
| 10 | 312.41 | C$5.10 | C$1,591.93 | quarterly | C$46,558.59 | 322.25 | C$164.01 | C$52,850.94 |
| 11 | 322.25 | C$5.64 | C$1,817.92 | quarterly | C$54,692.44 | 332.10 | C$186.97 | C$62,091.57 |
| 12 | 332.10 | C$6.25 | C$2,074.13 | quarterly | C$64,191.83 | 341.95 | C$213.14 | C$72,884.65 |
| 13 | 341.95 | C$6.91 | C$2,364.40 | quarterly | C$75,277.97 | 351.80 | C$242.98 | C$85,481.82 |
| 14 | 351.80 | C$7.65 | C$2,693.03 | quarterly | C$88,206.83 | 361.64 | C$277.00 | C$100,174.28 |
| 15 | 361.64 | C$8.47 | C$3,064.82 | quarterly | C$103,274.45 | 371.45 | C$315.78 | C$117,298.84 |
| 16 | 371.45 | C$9.38 | C$3,485.18 | quarterly | C$120,823.04 | 381.24 | C$359.99 | C$137,244.88 |
| 17 | 381.24 | C$10.39 | C$3,960.13 | quarterly | C$141,248.07 | 391.00 | C$410.39 | C$160,462.35 |
So if you’re looking for steady growth from a strong company that provides stable dividends, you can’t get much better than BIP stock.
