As you search for a tax-free savings account (TFSA) dividend stock, you might notice that finding the right fit is not always so easy. You want a strong yield, but you also don’t want to take on too much risk. This is where your search for reliability, predictability, and consistency should begin.
In Brookfield Infrastructure Properties LP (TSX:BIP.U, you have the right balance of yield and security. Please read on as I go through why this 4.7% yielding stock is the right dividend stock to buy with your TFSA contribution.
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What is Brookfield Infrastructure Partners?
Brookfield Infrastructure Partners is a global infrastructure company. It owns and operates long-life assets in the utilities, transport, midstream, and data industries across the globe. These industries are essential, and this makes Brookfield well-positioned in the infrastructure space.
The essential nature of Brookfield’s infrastructure assets means that they’re insulated from economic cycles, and that they provide a steady flow of cash flows. Net income and funds from operations in the fourth quarter of 2025 reflect the strong environment that Brookfield is enjoying. Net income per unit came in at $0.90 compared to $0.04 last year, and funds from operations increased 10% to $2.6 billion.
Why Brookfield Infrastructure Partners is a top dividend stock for your TFSA contribution
Let’s start answering this question by taking a look at what’s driving Brookfield’s strong results. Essentially, the company is benefitting from an infrastructure investment super-cycle that’s expanding in both scope and scale. The three structural themes that Brookfield is positioned to continue to benefit from are digitization, decarbonization, and deglobalization. These trends are increasing Brookfield’s multi-year growth visibility and capital deployment.
Over the last five years, Brookfield Infrastructure has doubled its revenue and more than doubled its operating cash flow. The company has enjoyed momentum in its infrastructure assets as well as many new growth opportunities, such as data centres.
While the business is undoubtedly a capital intensive one, Brookfield has a solid track record of managing its balance sheet and liquidity. Looking ahead, the company will continue to benefit from low interest rates. It’ll also continue to benefit from its capital recycling program, selling off non-core, lower return assets in favour of higher rate of return projects.
Sustainability of the dividend
During the fourth quarter of 2025, Brookfield showcased its strength as cash flows and earnings increased significantly. This led to a 6% distribution increase, which marked the 17th consecutive year of distribution increases of at least 5%. Brookfield’s payout ratio currently stands at a very healthy 66%.
Brookfield’s balance sheet is another strength that is driving solid shareholder returns. The company currently has record liquidity of $6 billion, which will rise even further as the closing of certain asset sales are imminent. This liquidity will be deployed into high return projects such as data centre platforms, which are seeing record growth and exceptional demand.
Risk management
Let’s turn now to Brookfield’s risk management efforts. In an effort to protect itself from any exuberance in the market, Brookfield has adopted certain policies.
The first one is that all of its development projects are underpinned by long-term contracts – there is no speculative building. In addition to this, Brookfield deals with the strongest investment grade parties. Also, the company focuses on top-tier locations and finally, it employs a self-funded model that locks in attractive economics.
The bottom line
Brookfield Infrastructure Partners stock has everything that TFSA dividend investors should be looking for – a generous yield, predictable and growing cash flows, and a strong financial standing. Get exposure to all of these good things by buying this dividend stock with your TFSA contribution today.
