Investing in fundamentally strong dividend stocks allows you to benefit from a steady passive-income stream and long-term capital gains. One top TSX dividend stock is Brookfield Infrastructure Partners (TSX: BIP.UN), which is down 32% from all-time highs.
Valued at a market capitalization of almost $20 billion, Brookfield Infrastructure operates essential infrastructure assets across four segments, including utilities, transport, midstream, and data centres. BIP manages critical infrastructure supporting energy, transportation, and communications across multiple countries globally.
Despite the ongoing pullback in BIP stock, it has returned 260% to shareholders since its initial public offering in 2008. If we adjust for dividend reinvestments, cumulative returns are closer to 772%.
Let’s see if this TSX stock is still a good buy in September 2025.
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How did the TSX dividend stock perform in Q2?
Despite a challenging macro environment, Brookfield Infrastructure delivered solid second-quarter (Q2) results. The Canadian heavyweight accelerated its capital deployment and recycling strategy, positioning it to capitalize on emerging infrastructure opportunities driven by artificial intelligence (AI) and energy transitions.
BIP reported funds from operations (or FFO) of US$638 million in Q2, an increase of 5% year over year. If we adjust for foreign exchange fluctuations, FFO growth would be higher at 9%. This performance was driven by strong organic growth across multiple segments, as well as contributions from recent acquisitions.
BIP achieved a record in capital-recycling activity in 2025, securing US$2.4 billion in sale proceeds through strategic partial divestitures. Notable transactions included the sale of a 23% stake in its Australian coal export terminal. BIP generated US$280 million from this stake sale while maintaining significant ownership, and completing additional sell-downs in data centre and intermodal logistics assets. These moves demonstrate an ability to crystallize value while retaining exposure to high-quality infrastructure assets.
BIP also deployed US$1.3 billion across three major acquisitions, highlighted by the recent closing of the US$9 billion acquisition of Colonial Pipeline. The refined products pipeline system spans 5,500 miles and provides 2.5 million barrels per day of capacity, offering BIP a mid-teen cash yield with attractive fundamentals. Additional investments include Hotwire’s fibre-to-the-home platform and a major railcar leasing portfolio.
The company’s Canadian midstream operations are experiencing strong momentum. BIP recently highlighted improved utilization rates, longer contract durations, and organic growth opportunities in this segment. The midstream business benefits from increased AI-driven power demand and enhanced energy export infrastructure, including the upcoming commissioning of new LNG facilities.
BIP’s data segment experienced stellar growth, with a 45% increase in FFO, reflecting the ongoing digitalization megatrend. It is well-positioned to capture opportunities from the deployment of AI infrastructure, particularly in the United States, where most current activity is concentrated.
With strong liquidity and a robust pipeline of opportunities, BIP appears strategically positioned to benefit from the infrastructure investment cycle while maintaining its disciplined capital-allocation approach.
What is the BIP stock price target?
Analysts tracking the TSX dividend stock forecast adjusted FFO (AFFO) to expand from US$2.35 per share in 2024 to US$3.26 per share in 2027. BIP is expected to pay shareholders an annual dividend of US$1.72 per share this year, which indicates a payout ratio of 67%. A widening AFFO base should enable the company to increase its annual dividend to US$2.21 per share by 2029, based on consensus estimates.
Today, BIP stock trades at 12 times forward AFFO, which is quite reasonable. If it is priced at 15 times AFFO, the TSX stock should trade at US$39 in early 2027, indicating an upside potential of 30% from current levels. If we adjust for dividends, cumulative returns will be closer to 40%.
