Brookfield Infrastructure Partners: Buy, Sell, or Hold in 2025?

Brookfield Infrastructure Partners (TSX:BIP.UN) is a high-quality fund.

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Brookfield Infrastructure Partners (TSX:BIP.UN)(TSX:BIPC) is a Canadian company that invests in infrastructure assets like telecommunications equipment and data centres. The company recently made headlines with its investment in some Texas-based data centres for $1.6 billion. The company was able to acquire the data centres at a discount price, as the previous owner was experiencing financial difficulties at the time of the acquisition. That deal followed a previous $5 billion deal for Compass Data centres, another Texas-based data centre company that provides green-powered facilities to hyper-scale businesses.

What’s undeniably interesting about Brookfield Infrastructure Partners is its operations. Data centres and telecommunications towers are some of the most important building blocks of modern society, and BIP.UN is among the biggest investors in them. However, interesting operations in and of themselves do not make a stock a buy. Many companies do “big things” but fail to deliver big value to shareholders. In this article, I will explore several aspects of Brookfield Infrastructure Partners’s business so you can decide if its stock is a fit for your portfolio.

New projects

When evaluating a company, it always helps to look at what it is doing currently because this tells you what it is investing in and what the return prospects are. I briefly touched on Brookfield Infrastructure Partners’s data centre investments at the beginning of this article. Some additional investments the company has made recently or is in the process of making include the following:

  • Triton International, a container shipping equipment leasing company, for $13.3 billion.
  • Financing for Intel’s new semiconductor fabrication facility.
  • A strategic acquisition of Inter Pipeline, previously a TSX-listed midstream energy company.

As you can see, Brookfield Infrastructure Partners’s investments run the gamut of industries, from traditional energy companies to semiconductors to data centres. Many of these projects are quite promising and relevant — in particular, the Intel financing deal — so BIP.UN will probably make money off them provided that it didn’t pay too much for the acquired companies.

Recent earnings

Brookfield’s most recent earnings release was a mixed showing, beating analysts’ revenue estimates but missing their earnings estimates. Some headline metrics included the following:

  • $5.2 billion in revenue, up 17.6%.
  • $234 million in net income, down 9%.
  • -$0.18 in per-share income to limited partners, down from $0.03.
  • $1.06 in funds from operations (FFO) per share.

These results were pretty mixed. On the one hand, FFO increased and was more than enough to cover BIP.UN’s dividend. On the other hand, the company’s net income attributable to limited partners was negative—very mixed signals.

Growth and profitability

Brookfield Infrastructure Partners has done considerable growing over the years, with its revenue compounding at 26% and its earnings compounding at 13.6% over the last five years. The company’s profitability picture is more mixed. In the trailing 12-month period, the company had a positive free cash flow margin of 4.8%, but the net margin was slightly negative. The gross margin was a healthy 25%. Overall, I’d characterize Brookfield Infrastructure Partners as a moderately profitable company.

Final verdict

Taking all things into account, I think Brookfield Infrastructure Partners is a reasonably good buy. It is not as valuable as its parent company, Brookfield, but it is a reasonably well-run enterprise with some great assets.

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 Andrew Button has positions in Brookfield. The Motley Fool has positions in and recommends Brookfield. The Motley Fool recommends Brookfield Corporation, Brookfield Infrastructure Partners, and Intel. The Motley Fool has a disclosure policy.

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