3 Reasons to Buy Brookfield Infrastructure Partners, and 1 Reason to Sell
Infrastructure is a boring investment when you compare it to technology or healthcare. But the world needs roads, bridges, and ports to function. And when you look at Brookfield Infrastructure Partners' (NYSE: BIP) generous 3.8% distribution yield and 15-year streak of annual distribution increases, it starts to look pretty compelling despite owning all those boring assets. Here's why you might want to buy this high-yield investment and one notable reason why you might not.
As noted, the world needs infrastructure to operate. If you have ever suffered through a prolonged power outage, you know just how quickly your life descends into chaos without power. But the same is true of energy pipelines, roads, ports, and railroads. These are the backbone of the modern world that we take for granted until they aren't available or fail to function properly.
So they are important, but what's really notable here is that they also tend to generate steady fees. Essentially, you are happy to pay for electricity because it improves your quality of life. The same is true of most infrastructure. The costs are generally spread over large customer bases, so no person is hit too hard. But, collectively, the fees add up to big numbers. And the fees tend to get increased every year along with inflation. Thus, there's a growing stream of income on top of any growth that comes from buying new assets. To put a number on that growth, Brookfield Infrastructure Partners has increased its funds from operations (FFO) from $0.62 per share in 2009 to an expected $3.84 in 2022.
Source Fool.com
