Why I Just Bought More of This Ultra-High-Yield Dividend Stock

Core Viewpoint - Brookfield Infrastructure Partners is viewed as a promising investment opportunity despite its recent stock performance, primarily due to its reliable distributions, diversified business model, and solid growth prospects. Group 1: Reliable and Growing Distributions - Brookfield Infrastructure offers a forward distribution yield of 5.67% and has a 16-year history of increasing distributions, with a compound annual growth rate (CAGR) of 9% [2] - The company targets an annual distribution growth rate between 5% and 9%, with a payout ratio comfortably set between 60% and 70% [3] Group 2: Diversified and Stable Underlying Business - Approximately 41% of Brookfield Infrastructure's funds from operations (FFO) are derived from its transportation businesses, which include 36,300 kilometers of rail operations and 3,300 kilometers of toll roads [6][8] - The utility operations contribute 25% of FFO, encompassing 3,500 kilometers of gas pipelines and 3,140 kilometers of electricity transmission lines [8] - The company also invests in technology and telecommunications, with assets including 28,000 kilometers of fiber optic cable, 306,000 telecom towers, over 140 data centers, and two semiconductor manufacturing foundries [9] Group 3: Solid Growth Opportunities - Since 2009, Brookfield Infrastructure has achieved a CAGR of 14% in FFO per unit and anticipates continued double-digit growth in the future [10] - Key growth drivers identified by management include digitalization, decarbonization, and deglobalization, which are expected to enhance demand for data infrastructure and cleaner energy solutions [11] - The company has a capital backlog exceeding $7.9 billion, with a significant portion allocated to data infrastructure assets, reflecting the rising demand for artificial intelligence [12] - Brookfield Infrastructure also employs a strategy of selling mature assets for attractive returns, having generated approximately $2.4 billion from asset sales in the first seven months of 2025 [13]