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Why Brookfield Infrastructure Partners (BIP) is a Great Dividend Stock Right Now
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All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Brookfield Infrastructure Partners in Focus
Headquartered in Hamilton, Brookfield Infrastructure Partners (BIP - Free Report) is a Finance stock that has seen a price change of 5.45% so far this year. Currently paying a dividend of $0.38 per share, the company has a dividend yield of 4.68%. In comparison, the REIT and Equity Trust - Other industry's yield is 4.65%, while the S&P 500's yield is 1.62%.
Looking at dividend growth, the company's current annualized dividend of $1.53 is up 6.3% from last year. Brookfield Infrastructure Partners has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 3.28%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Brookfield Infrastructure's current payout ratio is 54%. This means it paid out 54% of its trailing 12-month EPS as dividend.
BIP is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $3.04 per share, with earnings expected to increase 12.18% from the year ago period.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. It's important to keep in mind that not all companies provide a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, BIP is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).
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Why Brookfield Infrastructure Partners (BIP) is a Great Dividend Stock Right Now
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Brookfield Infrastructure Partners in Focus
Headquartered in Hamilton, Brookfield Infrastructure Partners (BIP - Free Report) is a Finance stock that has seen a price change of 5.45% so far this year. Currently paying a dividend of $0.38 per share, the company has a dividend yield of 4.68%. In comparison, the REIT and Equity Trust - Other industry's yield is 4.65%, while the S&P 500's yield is 1.62%.
Looking at dividend growth, the company's current annualized dividend of $1.53 is up 6.3% from last year. Brookfield Infrastructure Partners has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 3.28%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Brookfield Infrastructure's current payout ratio is 54%. This means it paid out 54% of its trailing 12-month EPS as dividend.
BIP is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $3.04 per share, with earnings expected to increase 12.18% from the year ago period.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. It's important to keep in mind that not all companies provide a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, BIP is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).