JARAMA Earlier this year I wrote an article on Brookfield Infrastructure Partners ( NYSE: BIP )( TSX: BIP.UN:CA )( BIPC ), which is a global infrastructure player with a market cap of over $14 billion. My thesis back then was predicated on the following three BIP characteristics: Durable current income, which is backed by defensive cash generating assets (e.
g., utility infrastructure, public private partnership agreements, regulated midstream segment etc.) The lion share of cash inflows linked to inflation dynamics or based on embedded periodical revenue escalators, which introduce an attractive organic growth component.
AFFO payout level, which leaves a decent chunk of internal equity for BIP to reinvest and generate additional cash flow growth on top of the aforementioned escalators. Investment grade balance sheet, which de-risks the overall investment thesis and also enables BIP to further support the inorganic growth aspect. All in all, my decision to invest in BIP boiled down to enjoying a relatively decent (and protected) dividend yield of ~5% in combination with a close to double digit dividend growth rate going forward.
Since the publication of my article two things have happened. First, BIP has underperformed the market by registering a flat total return performance. Second, BIP has releases its Q1, 2024 earnings deck bringing some interesting messages for us to digest and contextualize with my bull thesis.
Let's review the Q1, 2024 earnings deck and decide whether t.