Brookfield Infrastructure‘S (BIPC +1.11%)(BIP +0.98%) Revenue grew 10% in the first quarter, a meaningful uptick from last year’s 6% growth. Its investment was a major catalyst to support the creation of AI infrastructure.
Here’s a closer look at the company’s strong quarter and strong growth profile, both of which support Brookfield’s ability to grow its portfolio. high yield dividend (currently 4.9%).
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Strong start to the year
Brookfield Infrastructure earned $709 million, or $0.90 per share, in funds from operations (FFO) in the first quarter, an increase of 10% from last year. The global infrastructure operator benefited from solid organic growth, which came in at the high end of its 6% to 9% target range, driven by higher inflation-linked revenues, strong utilization in its midstream segment and the commissioning of more than $1.7 billion in growth capital projects. Brookfield also benefited from completing $1.4 billion of new investments over the past year. These growth drivers offset the impact of a $3.6 billion asset sale used to fund its growth initiatives.
Brookfield’s data infrastructure segment delivered the biggest boost, with its FFO rising 46% to $149 million. It benefited from the acquisition of its US bulk fiber network, organic growth in its data storage business and the commissioning of more than 200 MW of new data centers in the last year. Brookfield’s energy midstream segment also delivered strong results, with its FFO rising 12% to $190 million. It benefited from strong utilization and customer activity across its portfolio, as well as the acquisition of US Refined Pipeline System, which fully offset the contribution lost from the sale of its US Gas Pipeline System last year.
Brookfield Infrastructure
today’s change
(1.11%) $0.41
current price
$37.41
key data points
market cap
$5.0B
day limit
$36.43 -$37.70
52wk range
$34.18 -$51.72
volume
2.2m
average volume
1M
gross margin
63.46%
dividend yield
4.66%
Adding more growth drivers
Brookfield continued to execute on its growth strategy in the quarter. Creating strategic capital partnerships is an important aspect of its strategy. During the quarter, it established a new framework with a leading global investment-grade original equipment manufacturer (OEM) to launch an exclusive leasing platform for large, mission-critical industrial equipment. The company expects to deploy up to $375 million initially by providing long-term leasing solutions for equipment in data centers.
The deal follows a strategic partnership bloom energy Investing up to $5 billion to deploy up to 1 gigawatt of behind-the-meter power solutions at data centers. Brookfield secured another $430 million worth of projects during the quarter, bringing total commitments to $1.6 billion. Brookfield will invest approximately $60 million of this capital. Due to strong demand, Brookfield sees scope to expand the platform in the coming months.
Meanwhile, the company is on track to close the acquisition of Clarus, a leading gas infrastructure utility in New Zealand ($70 million net investment). The company also continues to sell mature assets to fuel its continued growth, having achieved asset sales of approximately $1 billion this year. The company’s capital recycling strategy continues to drive rapid earnings growth.
high power total return capability
Brookfield Infrastructure’s growth rate has accelerated again due to investments in AI infrastructure. The company’s strategic partnerships to support that build-out should continue to deliver strong growth in the coming years, giving Brookfield plenty of fuel to raise its high-yield dividend. This income-and-growth combination puts it in a position to deliver strong total returns, making it a great way to play AI infrastructure Bounce.
Matt DeLallo Holds positions in Brookfield Infrastructure and Brookfield Infrastructure Partners. The Motley Fool has a position in and recommends Bloom Energy. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has one Disclosure Policy.