Published Fri, 22 May 2020 11:31:54 -0400 on Seeking Alpha
BIP's overall performance has not skipped a beat in the face of the COVID-19 outbreak, sporting strong organic growth in Q1.
Nearly 75% of its cash flows come from businesses that are largely unaffected by COVID-19.
The balance sheet remains highly liquid and poised to capitalize on opportunities that may arise.
BIP's dividend remains well-covered and poised to grow at a solid clip over the long term.
Last August - while the economy was booming - I wrote that Brookfield Infrastructure Partners (BIP) "Remains One Of The Most Attractive Recession-Resistant Dividend Growth Stocks" for the following reasons:
Its businesses enjoy strong and durable competitive advantages. It enjoys broad sectoral, geographic, and currency diversification. It is well-managed with an excellent track record of generating strong investor returns. The business is healthy and growing organically. The capital recycling program is in full swing and is projected to add meaningfully to per unit growth in the coming months and years. The balance sheet remains liquid and debt is mainly non-recourse, fixed rate, and well-laddered. Most importantly, the distribution remains well-covered, has strong growth prospects, and the total return potential continues to be highly attractive. Now, about two-and-a-half months into the coronavirus's disruption of much of the developed world's economies, we see that this thesis continues to play out nicely. While shares are not dirt cheap relative to fundamentals, BIP remains a solid holding for risk-averse dividend growth investors.
Strong And Durable Competitive Advantages
BIP prides itself on owning only high-quality and/or high-potential assets across the utilities, energy, transport and data infrastructure sectors that have either current or the potential to (after Brookfield's operational expertise is deployed) generate stable cash flows, high margins, and strong internal growth.
The utilities segment consists of regulated or... Read more