Yahoo Finance Why I Continue Buying Shares of This Healthy and Secure 5.3%-Yielding Dividend Stock
Written by Daniel Da Costa at The Motley Fool Canada
When it comes to investing, having patience and investing for the long haul is well-known to be one of the most important strategies we can employ. However, in addition to keeping your emotions in check and giving your money a long runway of growth, it’s also paramount to find the highest-quality stocks to buy, whether they are dividend, growth, or value stocks.
That’s why I continue to buy shares of Brookfield Infrastructure Partners (TSX:BIP.UN), which is, in my opinion, one of the very best stocks on the TSX, especially to buy and hold for years to come.
What’s most intriguing about Brookfield is that it’s one of the best stocks in Canada at offering investors both a resilient, defensive business and one that can grow significantly.
When you can find a stock that does both, protects your capital in times of turmoil, and offers significant growth potential over the long haul, they’re often some of the best companies on the market.
Although it owns assets that a typical low-risk, defensive business would own — one that’s safe and reliable but also doesn’t offer significant growth potential — Brookfield is also consistently looking at where it can find growth next and which of its assets it can sell to recycle the capital into a new, higher potential opportunity.
That’s why, while Brookfield Infrastructure trades off its highs and offers a yield of roughly 5.3%, it’s a stock I continue to buy shares of.
In this environment, safe and secure dividend stocks are some of the best to buy
It’s never a bad idea to own safe, recession-resistant stocks, especially when the economic environment is so uncertain, such as what we continue to experience today.
However, as important as it is to own safe stocks that can protect your capital and reliable dividend stocks that can continue to earn you a return no matter what the state of the economy, owning too many defensive stocks can affect your portfolio’s growth potential over the long run, unless these stocks have significant growth potential themselves.
That’s why Brookfield is such an ideal stock to buy and hold for years. The infrastructure assets it owns, such as utilities, pipelines, railroads, ports and more, are all essential assets with robust and resilient operations. This ensures that Brookfield will see strong revenue and cash flow generation whether the economy is growing or potentially entering a recession.
Furthermore, with roughly two-thirds of Brookfield Infrastructure’s assets indexed to inflation, the company has a natural hedge against surging inflation or higher-for-longer interest rates.
Therefore, in addition to its long-term growth potential, Brookfield is one of the best dividend stocks to buy now because you can have confidence in its ability to remain profitable in the short term while also earning you an attractive return through its approximately 5.3% yield.
With that being said, though, the number one reason to buy Brookfield is for its significant growth potential, and not just the potential for significant capital gains, but also because Brookfield is consistently increasing the distribution it pays to investors as well.
Brookfield offers a tonne of long-term growth potential
I mentioned earlier that Brookfield is constantly looking at selling off assets and recycling that capital into new opportunities, which is why it can consistently grow the cash flow it generates as well as the funds it distributes to investors.
However, in addition to selling off assets that it has turned around and improved and looking for new undervalued opportunities it believes it can buy cheaply and grow organically, Brookfield is also looking for essential assets in growing industries, such as the data centres and telecom towers it’s been acquiring in recent years.
This way not only can it use its expertise to improve the profitability of the assets it owns, but by investing in businesses that have natural organic growth potential, Brookfield can improve its own growth prospects.
Therefore, if you’ve got cash to invest today and want a high-quality stock you can buy now and hold for years or even decades to come, there’s no question that Brookfield Infrastructure is certainly one of the best dividend stocks on the TSX to consider today.
The post Why I Continue Buying Shares of This Healthy and Secure 5.3%-Yielding Dividend Stock appeared first on The Motley Fool Canada.
Should you invest $1,000 in Brookfield Infrastructure Partners right now?
Before you buy stock in Brookfield Infrastructure Partners, consider this:
The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Brookfield Infrastructure Partners wasn’t one of them. The 10 stocks that made the cut could potentially produce monster returns in the coming years.
Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $15,578.55!*
Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 32 percentage points since 2013*.
See the 10 stocks * Returns as of 3/20/24
More reading
Can You Guess the 10 Most Popular Canadian Stocks? (If You Own Them, You Might Be Losing Out.)
How to Build a Bulletproof Monthly Passive-Income Portfolio in 2024 With Just $25,000
Fool contributor Daniel Da Costa has positions in Brookfield Infrastructure Partners. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.
2024
