In an uncertain market, top utility stocks shine as dependable income generators with the potential for steady long-term growth. Among them, Brookfield Infrastructure Partners (TSX:BIP.UN) is a prime example of a high-quality, diversified utility-like infrastructure play that has recently pulled back — down about 13% from its 52-week high. Yet, it remains an attractive buy-and-hold investment.
Let’s explore why this global infrastructure powerhouse could be a forever stock for long-term investing.
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A rock-solid foundation in essential assets
Brookfield Infrastructure Partners owns and operates a diversified portfolio of infrastructure assets across sectors, including utilities, transportation, midstream energy, and data. These are the types of critical services that people rely on in every economic climate.
Its revenue model is especially resilient: 85% of its funds from operations (FFO) are either regulated or secured by long-term inflation-linked contracts, insulating it from short-term shocks and making its cash flow highly predictable. At the same time, roughly 40% of its FFO comes from its transport segment (comprising of rail networks, toll roads, and diversified terminals) — often considered vulnerable to global trade disruptions — BIP’s structure buffers that risk impressively.
Solid financial performance and strategic moves
In the first quarter of 2025, Brookfield Infrastructure Partners delivered a 5% increase in FFO and a 5.1% rise in FFO per unit, underlining the company’s operational strength even in uncertain markets. Year to date, it has realized US$1.4 billion in asset sales and is on track to generate an additional US$550 million of net proceeds from further divestitures, including a lucrative 18% return on the final 25% stake in a U.S. gas pipeline. These moves enhance liquidity and allow BIP to recycle capital into higher-return opportunities.
The company’s liquidity position is strong, with US$4.9 billion in available capital, including US$2.0 billion in corporate liquidity and US$1.1 billion in cash across its 45 businesses in 15 countries. This financial flexibility positions BIP to continue acquiring valuable infrastructure assets as opportunities arise during market volatility, a key trait for long-term wealth creation.
Value, income, and growth in one package
Brookfield Infrastructure Partners is not only a pillar of stability — it’s also a dividend-growth machine. At a recent price of $43.79 per unit, the stock offers a generous 5.4% cash distribution yield. Even better, it boasts a 10-year distribution growth rate of 7.7%, and management targets sustainable annual distribution hikes of 5-9%.
Despite a strong recent rebound — from a low of $37 in April 2025 to over $43 now — the stock still trades at an 18% discount to analysts’ fair value estimates, leaving room for over 20% upside over the near term. The rebound demonstrates investors don’t need to time the market perfectly to benefit: buying at a low locks in a decent yield with long-term appreciation potential.
The Foolish investor takeaway
Brookfield Infrastructure Partners combines the reliability of a utility with the upside potential of a global infrastructure investor. Its essential services, inflation-linked contracts, disciplined capital recycling, and consistent dividend growth make it a rare gem among income stocks.
While market volatility may cause short-term price swings, those dips should be viewed as buying opportunities. For investors seeking a high-quality, inflation-resistant asset with both income and capital appreciation potential, Brookfield Infrastructure Partners is a magnificent stock to buy and hold forever.
