Brookfield Infrastructure Partners (TSX:BIP.UN) is one of the largest owners and operators of critical and diverse global infrastructure networks. It’s a company that has exposure to infrastructure assets with stable cash flows, high margins, and strong growth prospects.
Here’s why Brookfield Infrastructure Partners stock is a buy in 2025.
Brookfield Infrastructure: High yields and steady cash flow
Currently trading just above $42, Brookfield Infrastructure stock has had a difficult few years. But today, there is a lot that it has going for it. First of all, we have Brookfield Infrastructure’s dividend and dividend-growth potential. Today, the stock yields 5.85%. More importantly, the company has a dividend growth target of 5-9% annually.
Looking to the company’s dividend history, we can see that Brookfield’s dividend has grown 35% in the last five years. This represents a compound annual growth rate (CAGR) of 6.15%. In the last 15 years, Brookfield’s dividend has increased at a CAGR of 9% — right in line with the company’s dividend-growth target.
High-quality assets
The infrastructure networks that Brookfield owns deliver some of the necessities of life to society, such as energy, water, freight, and data. This makes them essential, which means that they deliver stable and growing cash flows. In fact, in 2024, Brookfield reported funds from operations of $2.468 billion, an increase of 8% versus the prior year.
Brookfield’s largest segment is its transport segment, which accounts for half of its funds flow. In 2024, this segment was boosted significantly by the company’s acquisition of the global intermodal logistics company and an increased stake in the Brazilian integrated rail and logistics operation.
In addition to this, Brookfield has the data infrastructure business, which is an area of high growth for the company. In 2024, this segment accounted for 13% of the company’s funds flow.
It is important to highlight that not only is Brookfield the owner of a multitude of high-quality assets, but it is also the operator. It is through management’s expertise in the sectors in which it operates that Brookfield has been able to extract value from the many acquisitions that the REIT has made.
Valuation
In terms of valuation, Brookfield Infrastructure Partners appears attractively valued, trading at 13 times cash flow. This valuation comes with the security of Brookfield’s strong balance sheet, strong global presence, and a long track record of generating shareholder value. In fact, over the last 30 years, Brookfield has generated a total compound return of over 18,000% for shareholders.
With well-established operations in more than 30 countries and in a diversified list of sectors, Brookfield is well-positioned to continue to thrive. This network, combined with Brookfield’s strong balance sheet and funding capabilities, will enable future growth.
The bottom line
As an income-producing stock, Brookfield Infrastructure Partners checks all the boxes. Its business is highly predictable, as it’s backed by long-term contracts and regulatory frameworks. Also, its assets are key to modern society and an essential part of everyday life, thus generating strong, growing cash flows.
