NYSE:BIP - Post Discussion
Post by
retiredcf on Dec 28, 2022 10:14am
TD
December 21, 2022 Our Action List Pick
Our High Conviction Buy
Brookfield Infrastructure Partners L.P. BIP-N, BIP.UN-T: US$33.02; BUY 12-Month Target: US$49.00
Brookfield Infrastructure Partners (BIP) owns what we see as a premier portfolio of infrastructure assets that generate visible cash flows, have high barriers to entry, and enjoy strong growth prospects. The portfolio is also notably well-diversified by geography, by sector, and by regulatory regime.
BIP is uniquely positioned to benefit from elevated inflation, which should continue into 2023, because 70-75% of EBITDA is inflation-linked, while 10-15% has pass- through mechanisms under fee-for-service models, such that periods of high inflation should drive margin expansion.
BIP also has a near-record capex backlog, which provides a relatively low-risk and highly visible source of near to medium term growth. Furthermore, having invested/ committed US$2.8 billion to new investments year-to-date, BIP has already largely achieved its M&A deployment targets for both 2022 and 2023 (US$1.5 billion/year).
And finally, BIP is well-positioned to weather higher interest rates/FX volatility, with ~90% of its debt long term/fixed-rate (excluding Brazil) and 80%+ of its FFO denominated in/hedged to the U.S. dollar.
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