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Got $100 to Invest? 1 Top Dividend Stock Yielding Over 4% You Can Buy Without Hesitation in June.
BIPBrookfield Infrastructure Partners(BIP) The Motley Fool·2025-06-02 07:40

Core Viewpoint - Investing in dividend stocks, particularly Brookfield Infrastructure, is presented as a strong strategy for wealth growth, with the potential for significant returns over time due to its robust dividend growth and stable cash flow generation. Group 1: Dividend Growth and Returns - Brookfield Infrastructure offers an attractive dividend yield of over 4% and has a strong record of increasing its payouts, targeting a 5% to 9% annual increase in dividends [2][11] - The company has achieved a 14% compound annual growth rate in funds from operations (FFO) per share since its inception in 2009, contributing to a 9% compound annual dividend growth [6] - Investors in Brookfield have experienced a 13.5% annualized total return, highlighting the effectiveness of its dividend strategy [6] Group 2: Business Model and Cash Flow - Brookfield operates a diversified portfolio of high-quality infrastructure assets that generate stable cash flows, with 85% of its funds from operations backed by long-term contracts and government-regulated rate structures [4][5] - The company targets a payout ratio of 60% to 70% of its stable cash flow in dividends, allowing for reinvestment in growth while maintaining financial flexibility [5] - Inflation-linked contracts are expected to contribute an additional 3% to 4% to FFO per share annually, with economic growth adding another 1% to 2% [7] Group 3: Growth Strategy and Capital Projects - Brookfield has a record backlog of nearly 8billionincapitalprojects,primarilyinthedatasegment,whichisexpectedtoadd28 billion in capital projects, primarily in the data segment, which is expected to add 2% to 3% to FFO per share each year [8] - The company anticipates organic growth in FFO per share of 6% to 9% annually, supporting its dividend growth plan [9] - Recent strategic acquisitions, including a 500 million investment in a U.S. refined products pipeline and a joint venture to acquire a rail operating lease portfolio, are expected to enhance FFO per share growth [10]