With the stock market continuing to remain highly uncertain, right now, it’s as important as ever to find high-quality growth stocks that you can buy and hold for the long haul.
Not only do conflicting economic numbers continue to impact the share prices of stocks across the board day in and day out, but stronger-than-expected earnings have also been impacting share prices, resulting in the rally we’ve seen to start this week.
There is still a concern about stubbornly high inflation; however, at the same time, with high-quality stocks reporting strong and, in some cases, record earnings, the market continues to flip-flop between falling share prices and rebound rallies.
Therefore, with all the uncertainty we continue to experience, it’s never been more important to find the highest-quality stocks on the market to buy and commit to for the long haul.
That’s why, with Brookfield Infrastructure Partners (TSX:BIP.UN) still trading roughly 24% off its 52-week high, it’s one of the best growth stocks to buy now.
Brookfield Infrastructure is the perfect growth stock to buy right now
When it comes to the current market environment, there is a significant divergence in the performance of stocks. Smaller growth stocks with higher risk have had trouble gaining any value, and many trade at the bottom of their 52-week ranges.
And while Brookfield isn’t quite that cheap, the fact that such a high-quality and reliable stock with defensive operations trades roughly 25% off its high certainly makes it one of the best stocks to buy now.
Brookfield is ideal not just because it’s a long-term growth stock with years of potential and a track record of impressive performance but also because its operations are so defensive. Therefore, it’s a stock you can have confidence in today, even with all the uncertainty in the economy.
With assets such as utility businesses, ports, railroads, telecom towers, and more, Brookfield Infrastructure is one of the most recession-resistant growth stocks on the TSX today. Furthermore, investors don’t have to worry about persistently high inflation or higher for longer interest rates since roughly 65% of Brookfield’s revenue is indexed to inflation, which acts as a natural hedge.
Unlike typical defensive stocks that offer essential services, though, Brookfield also offers attractive and consistent long-term growth potential as well as a consistently increasing distribution, which is why it’s one of the best growth stocks to buy now.
In fact, management is constantly evaluating which of its assets it can sell at a premium to use the proceeds to invest in new opportunities that will expand and grow its operations.
So, it’s no surprise that analysts estimate Brookfield’s earnings before interest, taxes, depreciation, and amortization (EBITDA) will increase by over 15% in 2024, and its funds from operations will grow by over 13% this year.
Brookfield also aims to increase its distribution by 5-9% every single year. So, in addition to buying the stock today and locking in an attractive 5.9% yield, investors can expect consistent increases to the passive income they earn from Brookfield every year they hold the impressive growth stock.
How cheap is Brookfield today?
With Brookfield trading roughly 25% off its 52-week high and at a forward enterprise value (EV) to EBITDA ratio of roughly 12 times, not only is it trading below its 10-year historical EV/EBITDA average of 14.6 times, but it’s also trading below its historical range of 12.5 times to 16.7 times showing why it’s one of the best growth stocks to buy now.
Furthermore, over the last 10 years, Brookfield has averaged a forward yield of roughly 4.7%. So, with the stock offering a yield of roughly 5.9% today, it’s clear just how cheap it is in the current environment and the opportunity investors have to buy undervalued and lock in a higher-than-normal yield.
Most importantly, though, because Brookfield is such a defensive and reliable stock, it’s an investment you can have confidence holding in this uncertain economic environment, even if the landscape continues to worsen before it gets better.
So, if you’re looking for a high-quality growth stock that you can buy undervalued today, Brookfield is easily one of the best stocks to consider on the TSX.
