Investment Opportunity - The world requires an investment of $7 trillion in infrastructure to support AI adoption over the next decade, covering AI factories, compute infrastructure, and power transmission [1] Company Overview - Brookfield Infrastructure is a leading global infrastructure company with diversified operations in utilities, energy midstream, transportation, and data infrastructure, generating steadily growing cash flow [5] Financial Performance - In 2025, Brookfield's funds from operations (FFO) grew by 6%, driven by inflation-related rate increases, volume growth, over $1.5 billion in new capital projects, and more than $1.1 billion in acquisitions [5] Data Center Capacity - Brookfield operates approximately 1.2 gigawatts (GW) of data center capacity globally, with an additional 1.1 GW of contracted capacity in its backlog and land capable of supporting 1.3 GW more [7] Growth in Data Infrastructure - The data infrastructure segment saw a more than 50% increase in FFO last year, aided by the commissioning of 220 megawatts (MW) of new data center capacity [6] Strategic Investments - Brookfield is investing in innovative power solutions for data centers, including a $5 billion framework agreement with Bloom Energy, which has led to the installation of 55 MW of power and secured contracts for an additional 230 MW by mid-2027 [8]

Core Insights - Brookfield Infrastructure Partners L.P. reported a net income of $1.1 billion for the year ended December 31, 2025, significantly up from $391 million in 2024, driven by strong operational performance and capital recycling activities [2][3][31] - The company achieved funds from operations (FFO) of $2.6 billion, or $3.32 per unit, representing a 10% increase over normalized FFO and a 6% increase compared to 2024 [3][4][41] - The company expects FFO to increase further in 2026 as new investments contribute to results and the growth pipeline expands to include AI infrastructure [2][8] Financial Performance - Net income attributable to the partnership for 2025 was $1.1 billion, with a per unit income of $0.90, compared to $0.04 in 2024 [2][31] - FFO for 2025 was $2.6 billion, or $3.32 per unit, compared to $2.5 billion, or $3.12 per unit, in 2024 [3][41] - Revenues for 2025 reached $23.1 billion, up from $21.0 billion in 2024, while direct operating costs increased from $15.7 billion to $16.9 billion [31][53] Segment Performance - The utilities segment generated FFO of $786 million, a 7% increase year-over-year, benefiting from inflation indexation and new capital commissioned [4][5] - The transport segment's FFO was $1.1 billion, consistent with the previous year after normalizing for asset sales and foreign exchange [5][6] - The midstream segment reported FFO of $668 million, reflecting a 7% year-over-year increase due to higher volumes and activity levels [6] - The data segment saw a significant increase in FFO to $502 million, over 50% higher than the previous year, driven by new investments and strong organic growth [7] Strategic Initiatives - The company exceeded its $3 billion capital recycling target in 2025 and completed $1.5 billion in new investments [2][8] - Asset sales reached a record $3.1 billion in 2025, with expectations to continue this momentum into 2026 [12][13] - The company has secured additional projects under a framework agreement with Bloom Energy, totaling approximately 230 MW of power generation [9] Dividend and Distribution - The Board of Directors declared a quarterly distribution of $0.455 per unit, a 6% increase compared to the prior year, payable on March 31, 2026 [16][44] - The equivalent quarterly dividend for Brookfield Infrastructure Corporation's shares was also declared at $0.455, aligning with the distribution for BIP units [44][45]

Core Insights - Brookfield Infrastructure has generated a nearly 14% annualized total return since its inception in 2008, indicating strong performance and wealth creation potential [1][3] - The company expects to grow its funds from operations (FFO) per share by more than 10% annually over the long term, supported by various growth drivers [4][6] - A $1,000 investment today could grow to over $25,000 in 25 years, assuming continued performance at historical rates [5] Financial Performance - Brookfield Infrastructure has achieved a 14% compound annual growth rate in FFO from 2009 through 2024, contributing to a 9% compound annual dividend growth [3][4] - The company anticipates FFO per share growth of around 14% annually in the medium term, driven by inflation-linked rate increases, volume growth, and strategic acquisitions [4] Dividend Outlook - The current dividend yield is nearly 4%, with plans to increase dividends by 5% to 9% annually [4][6] - This combination of income and earnings growth supports the company's ability to deliver returns close to its historical average [5]

Group 1 - Triton International was acquired by Brookfield Infrastructure in 2023, but its preferred shares remain outstanding [1] - The Investment Doctor emphasizes a portfolio mix of dividend and growth stocks, focusing on European small-cap investments [1] - The investment group European Small Cap Ideas provides exclusive research on appealing Europe-focused investment opportunities [1] Group 2 - The European Small Cap Ideas portfolio and the European REIT Portfolio are featured as model portfolios [1] - Weekly updates and educational content are provided to enhance understanding of European investment opportunities [1] - An active chat room is available for discussions on the latest developments of portfolio holdings [1]

Industry Overview - The natural gas distribution industry is experiencing rising demand due to the clean-burning nature of natural gas, which is essential for transporting gas from production regions to consumers across the U.S. [1][3] - The U.S. has a substantial natural gas reserve of 3,353 trillion cubic feet and a pipeline network of 2.5 million miles [4]. Key Trends - The shale revolution has significantly increased natural gas production, leading to higher demand from various customer groups [3]. - The industry faces challenges from aging infrastructure, with many pipelines nearing the end of their effective service life, raising safety and maintenance concerns [6]. - Competition from other clean energy sources is increasing, as renewable energy projects become more affordable and reliable, potentially impacting the demand for natural gas [5]. Financial Insights - The Zacks Utility Gas Distribution industry currently ranks 149 out of 243 Zacks industries, indicating weak near-term prospects, with a negative earnings outlook as earnings estimates for 2025 have decreased by 7.7% since December 31, 2024 [10][11]. - The Gas Distribution industry has underperformed compared to the S&P 500 and the Utility sector, with an 8.5% gain over the past year compared to 14.5% for the Utility sector and 16.1% for the S&P 500 [12]. Valuation Metrics - The industry is trading at a trailing 12-month EV/EBITDA ratio of 10.35X, which is lower than the Zacks S&P 500 composite's 18.77X and the sector's 15.27X [13]. Company Highlights - **Atmos Energy Corp.**: Plans to invest $3.6 billion in fiscal 2026 to enhance infrastructure and replace old pipelines, with a current dividend yield of 2.4% and long-term earnings growth projected at 7.98% [15][16]. - **Brookfield Infrastructure Corp.**: Engaged in natural gas and electricity supply, recently signed a $5 billion deal with Bloom Energy and a $20 billion partnership with Qai, with a dividend yield of 3.68% and significant earnings growth estimates [17][18]. - **Spire Inc.**: Focused on organic expansion through infrastructure investments, plans to invest approximately $809 million in fiscal 2026, with a dividend yield of 3.82% and long-term earnings growth estimated at 10.54% [19][20].

Industry Overview - Natural gas distribution companies transport natural gas from production regions to consumers across the U.S., with a significant underground pipeline network [1] - The shale revolution has increased natural gas production, leading to higher demand due to its clean-burning nature [3] - The U.S. has 3,353 trillion cubic feet of natural gas and a pipeline network of 2.5 million miles [3] - Major concerns include aging infrastructure and rising investment costs due to interest rate hikes [3] Key Trends - Increasing competition from renewable energy sources is making utility-scale projects cheaper and more reliable, posing economic risks to new pipeline investments [4] - Aging infrastructure is a challenge, with many pipelines nearing the end of their service life, leading to safety concerns and higher maintenance costs [5] - A decline in interest rates, with the Federal Reserve lowering rates by 175 basis points to a range of 3.50-3.75%, is expected to benefit capital-intensive utilities [6] Industry Performance - The Zacks Utility Gas Distribution industry ranks 149, placing it in the bottom 38% of 243 Zacks industries, indicating weak near-term prospects [7] - Earnings estimates for the industry have decreased by 7.7% since December 31, 2024 [8] - The Gas Distribution industry has gained 8.5% over the past year, underperforming the Utility sector's 14.5% and the S&P 500's 16.1% [9] Valuation - The industry is trading at a trailing 12-month EV/EBITDA ratio of 10.35X, compared to 18.77X for the S&P 500 and 15.27X for the sector [12] - Over the past five years, the industry's EV/EBITDA has ranged from a high of 12.41X to a low of 9.55X, with a median of 10.91X [12] Company Highlights - **Atmos Energy Corporation (ATO)**: Plans to invest $3.6 billion in fiscal 2025 and 2026 to enhance infrastructure and replace old pipelines, with a current dividend yield of 2.4% and long-term earnings growth projected at 7.98% [16][17] - **Brookfield Infrastructure Corporation (BIPC)**: Engaged in natural gas and electricity supply, with significant growth initiatives including a $5 billion deal with Bloom Energy and a $20 billion partnership with Qai, offering a dividend yield of 3.68% [21][22] - **Spire Inc. (SR)**: Focused on organic expansion through infrastructure investments, planning to spend $922 million in fiscal 2025 and $809 million in fiscal 2026, with a dividend yield of 3.82% and long-term earnings growth of 10.54% [25][26]

Core Thesis - Brookfield Infrastructure Corporation (BIPC) presents a compelling long-term investment opportunity due to its combination of income stability, structural growth, and defensive resilience [2][4] Financial Performance - BIPC's share price was $44.93 as of December 1st, with a trailing P/E ratio of 4.25 [1] - Revenue growth from $1.86 billion in 2015 to an expected $21.54 billion by mid-2025, and operating income growth from $0.55 billion to $5.27 billion [3] - Consistent reinvestment has increased from $0.52 billion in 2015 to $4.30 billion today, supporting a disciplined growth model [3] Dividend Growth - BIPC is expected to deliver dependable annual dividend growth of 5–6%, which is approximately double the inflation rate [3] Market Position and Resilience - BIPC operates essential global assets across utilities, transport, midstream energy, and data infrastructure, providing reliable cash flows through various market conditions [2] - The company's resilience was demonstrated during the pandemic, maintaining operations and dividends despite market turmoil [2] Strategic Growth Factors - BIPC benefits from inflation-linked contracts that allow revenues to rise with prices, while lower interest rates enhance profitability [3] - The company is positioned as a beneficiary of the AI revolution, with its data centers and fiber networks supporting AI computation and connectivity [4] Investment Appeal - BIPC combines steady, inflation-protected cash flows typical of utilities with growth potential driven by innovation and global infrastructure demand [4][6]

Group 1 - Morgan Stanley raised the price target on Brookfield Infrastructure (BIPC) to $53 from $50 while maintaining an Equal Weight rating on the shares [1] - The firm is updating price targets for North American Midstream & Renewable Energy Infrastructure stocks under its coverage [1] - A framework agreement for a Canadian crude oil pipeline project and oil sands carbon capture has been reached, but several unknowns remain [1]

Core Viewpoint - Brookfield Infrastructure has underperformed compared to the S&P 500 over the past five years, despite strong financial results and a high-yielding dividend [1][2][5]. Performance Summary - Over the past five years, Brookfield Infrastructure's stock has returned -3.8%, while the S&P 500 has returned 88.9% [2]. - The one-year, three-year, and five-year performance of Brookfield Infrastructure compared to the S&P 500 shows significant underperformance in all periods [2][4]. Dividend Analysis - Brookfield Infrastructure offers a dividend yield of 3.8%, which is more than double that of the S&P 500 at 1.2% [3]. - The company has increased its dividend for 16 consecutive years, with a compound annual growth rate of 9% [3]. Financial Performance - In 2020, Brookfield generated $1.5 billion or $2.09 per share of funds from operations (FFO), and it expects to produce $2.6 billion or $3.32 per share of FFO this year, indicating compound annual growth rates of 13% and 10% respectively [5]. - The dividend payout ratio has decreased from 78% to 67% as earnings have grown faster than dividend payments [5]. Valuation Insights - Brookfield Infrastructure's valuation has become cheaper, currently trading at about 13.5 times its FFO, down from approximately 21.5 times five years ago [6]. - The company has faced headwinds such as a strong U.S. dollar and higher borrowing costs, which have impacted FFO growth [7]. Future Outlook - Positive trends are expected as the Federal Reserve cuts interest rates and the U.S. dollar may weaken, potentially leading to a reacceleration of FFO per share growth towards its long-term average of 14% annually [8]. - The organic project backlog has significantly increased from $2 billion in 2020 to $8 billion today, indicating growth potential [8]. Investment Considerations - Brookfield Infrastructure's stock has delivered underwhelming performance due to previous premium valuations and headwinds that slowed growth [9]. - With a much cheaper valuation and growth rate poised to reaccelerate, the company could deliver higher total returns for investors in the coming years [9].

Core Viewpoint - Brookfield Infrastructure Partners L.P. plans to redeem all outstanding Series 3 Preferred Units for cash on December 31, 2025, at a price of C$25.00 per unit, with a final quarterly distribution of C$0.34375 payable on the same date [1]. Group 1: Company Overview - Brookfield Infrastructure is a leading global infrastructure company that operates high-quality, long-life assets in utilities, transport, midstream, and data sectors across the Americas, Asia Pacific, and Europe [2]. - The company focuses on assets with contracted and regulated revenues that generate predictable and stable cash flows [2]. - Investors can access Brookfield Infrastructure's portfolio through Brookfield Infrastructure Partners L.P. or Brookfield Infrastructure Corporation [2]. Group 2: Parent Company Information - Brookfield Infrastructure is the flagship listed infrastructure company of Brookfield Asset Management, which manages over $1 trillion in assets [3].