Why Brookfield Infrastructure Partners L.P. Would Make a Great Addition to Your TFSA

Discover the qualities that make Brookfield Infrastructure Partners L.P.(TSX:BIP.UN)(NYSE:BIP) such a unique investment and a promising candidate for your TFSA.

| More on:

It’s no secret that North America is in dire need of a massive reinvestment in its infrastructure.

Roads in many North American cities are in disrepair, bridges need to be built, not to mention expanding capacity in hospitals for a rapidly aging population and schools that need to be built to foster the growth of future generations.

Thankfully, the Canadian federal government has taken notice and has launched its “Investing in Canada” plan, which will see the government dedicate more than $180 billion over the next 12 years to invest in various infrastructure initiatives.

The bulk of the spending will go towards improvements in public transit, an area where Canada lags many developed nations, with a large portion also going towards investments in green infrastructure, including major investments in clean water initiatives and building capacity for clean sources of energy that will fuel the country for the next century.

But the government can’t do it all on its own, and that’s where Brookfield Infrastructure Partners L.P. (TSX:BIP.UN)(NYSE:BIP) comes in.

Brookfield is one of the world’s largest investors, owners, and operators of infrastructure assets globally.

Brookfield generates value by taking control of infrastructure assets, operating them to generate stable and consistent cash flows backed by long-term contracts, and strategically monetizing its investments by exiting them at the opportune time.

While Canada is currently undergoing a major infrastructure initiative, it’s far from being the only major nation to be doing so.

The United States, France, Germany and the United Kingdom all need to dedicate resources to infrastructure over the coming decades.

One of the nice things about Brookfield’s operations is that they are well diversified by sector and geography, so the company’s portfolio is far from being concentrated or at risk owing to a single counterparty, regulatory regime, or market cycle.

Another quality that makes Brookfield great, particularly for long-term investors or those considering adding the company to their TFSA, is that the company’s contracts are tied to inflation. This means that the company’s long-term contracts can be readjusted for price increases, so as to eliminate the risk that Brookfield gets itself in a situation where the contract is generating sub-optimal returns.

Essentially, the company receives predictable cash flow streams from its contracts, like a fixed-income investment, which are protected by inflation (which most bonds don’t offer), while simultaneously offering for the potential for capital appreciation, as long as the company can continue to earn a return on its investments that are above the cost of capital.

On top of all that, Brookfield shares offer an enticing yield of 4.03% today, which is nothing to shake a stick at.

And the company has been increasing its dividend by an average of 10% per year for the past 10 years and offers the promise of the same for years to come.

Bottom line

An investment in Brookfield Infrastructure Partners offers an enticing combination of some of the best qualities found in fixed-income, dividend, and capital investments.

On top of all that the company operates as a global leader in an industry that is in dire need of investment both in Canada and abroad.

Foolish investors should keep a watchful eye on Brookfield shares, maybe waiting for a slight pullback to the company’s 200-day moving average for the chance to buy this blue-chipper on the dip.

Should you invest $1,000 in Suncor Energy right now?

Before you buy stock in Suncor Energy, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Suncor Energy wasn’t one of them. The Top 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 $21,345.77!*

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 24 percentage points since 2013*.

See the Top Stocks * Returns as of 4/21/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Jason Phillips has no position in the companies mentioned. Brookfield Infrastructure Partners is a recommendation of Stock Advisor Canada.

More on Dividend Stocks

a sign flashes global stock data
Dividend Stocks

Where I’d Invest $8,000 In the TSX Today

There's no shortage of great stocks on the TSX today. Here's a look at three options to consider adding to…

Read more »

Two seniors float in a pool.
Dividend Stocks

How I’d Turn $7,000 Into a Growing Income Stream for Retirement

Investors looking for a growing income stream for retirement will find these stocks must-buy options right now.

Read more »

Tractor spraying a field of wheat
Dividend Stocks

Top 2 Canadian Stocks to Buy for Long-Term Gains

Sometimes investors worry too much about the near term, which is what makes these two top value options.

Read more »

ETF stands for Exchange Traded Fund
Dividend Stocks

How I’d Build a Monthly Dividend Portfolio With $7,000

Investors can start building a monthly dividend portfolio through dividend ETFs that pay out monthly.

Read more »

a person watches a downward arrow crash through the floor
Dividend Stocks

Is This Correction Your Chance? Buy Up These 4 Dividend Stocks on Sale

These four dividend stocks aren't only top choices for yield, but for safety as well.

Read more »

ways to boost income
Dividend Stocks

1 Dividend Stock Down 34% From 52-Week Highs to Buy for Lifetime Income

This dividend stock is likely to just do even better, especially amidst copper prices.

Read more »

Man data analyze
Dividend Stocks

1 Magnificent Consumer Stock Down 17% to Buy and Hold Forever

Alimentation Couche-Tard (TSX:ATD) stock might be one of the best bargains available on the stock market for long-term investors right…

Read more »

data analyze research
Dividend Stocks

This 6% Dividend Stock Hasn’t Missed a Payment in 3 Decades

This TSX stock has a solid track record of dividend payments and growth. Moreover, it offers a sustainable yield of…

Read more »