Investing in beaten-down dividend stocks allows you to benefit from a higher yield and the possibility of capital gains. In this article, I have identified a blue-chip Canadian dividend stock that is down 11% from its all-time high and offers a forward yield of almost 5% in December 2025.
Valued at a market cap of over $20 billion, Brookfield Infrastructure Partners (TSX: BIP.UN) operates essential infrastructure assets globally across four main segments.
- Its Utilities segment manages electricity transmission lines, natural gas pipelines, and millions of utility connections.
- The Transport segment operates extensive rail networks and motorways spanning thousands of kilometres.
- The Midstream segment provides natural gas transmission, processing, and storage through pipelines and processing plants.
- The Data segment offers telecommunications towers, fibre optic networks, data centres, and semiconductor manufacturing facilities.
Operating across the United States, Canada, Brazil, India, Australia, and other countries, Brookfield provides critical infrastructure services for energy, transportation, and digital connectivity.
The TSX stock has returned 124% to shareholders in the past decade. If we adjust for dividend reinvestments, cumulative returns are closer to 242%. Brookfield Infrastructure stock has returned more than 1,530% to shareholders in dividend-adjusted gains since its initial public offering in 2009.
Is the TSX dividend stock still a good buy?
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The bull case for the TSX dividend stock
Brookfield Infrastructure Partners is positioning itself at a significant inflection point, expecting to return to annual growth rates exceeding 14% over the next five years after delivering 10% growth in recent years.
It recently outlined an aggressive expansion strategy centred on capitalizing on the AI infrastructure buildout, which the company views as a multi-generational investment opportunity comparable to historic infrastructure cycles, such as railroad and electric grid development.
Brookfield is pursuing seven AI factory projects across five countries that collectively represent six gigawatts of compute capacity, three million GPUs (graphics processing units), and US$200 billion in total capital deployment over time.
The AI opportunity comes as Brookfield has scaled up its core business capabilities. Over the past five years, the company’s embedded organic growth from its capital backlog has grown fourfold.
The number of high-growth platform businesses Brookfield owns has more than doubled, and its asset rotation program has expanded fivefold, providing a self-funding mechanism for new investments at the lowest cost of capital.
Brookfield has already secured more than $3 billion in asset sales this year, achieving a 20% internal rate of return. Management expects these proceeds to be redeployed into higher-returning investments at 15% to 17% versus the 11% cost. These investments could create up to $6 billion in incremental value from this year’s sales alone.
Is BIP stock still undervalued?
Analysts tracking BIP stock forecast its adjusted funds flow from operations (AFFO) per share to increase from US$2.35 in 2024 to US$3.30 in 2027.
In this period, its annual dividend per share is projected to increase from US$1.62 to US$1.93. It suggests that BIP’s payout ratio will improve from 69% in 2024 to 58%, providing the company with the flexibility to lower balance sheet debt and pursue accretive acquisitions.
The blue-chip dividend stock is forecast to end 2029 with an annual dividend of US$2.21 per share, up from just US$0.93 per share in 2016, significantly enhancing the yield-at-cost.
If BIP stock is priced at 12 times forward AFFO, which is quite cheap, it could gain 10% over the next 12 months. If we adjust for dividends, cumulative returns could be closer to 15%.
