High dividend stock to watch: Brookfield Infrastructure Partners L.P. (BIP), founded in 2007 and based in Hamilton, Bermuda, engages in the utility businesses, transport and energy businesses and timber assets in North and South America, Australasia, and Europe.
Dividend:
The high dividend stock has a favorable payout metric and solid fundamental metics. Brookfield Infrastructure currently returns cash to unitholders at an annualized yield of 4.21%. The partnership has grown its distributions for the third consecutive years at an average annualized growth rate of 11.38%. The company announced a most recent quarterly distribution of $0.375 per unit. The ex-dividend date is August 29, 2012 and the payment date is September 28, 2012.
Operations:
Brookfield Infrastructure posted second-quarter funds from operations of $111 million or $0.60 per unit versus $102 million or $0.65 per unit last year. For this quarter, the company reported net loss of $26 million or $0.14 per unit compared to net income of $26 million or $0.17 per unit in the second quarter of 2011. The earnings result fell short of the analyst estimate of a net profit of $0.34 per unit. The decline was primarily due to certain non-cash charges that totaled approximately $40 million during the current period primarily attributable to the recent refinancing completed at North American gas transmission business and an impairment charge relating to a restructuring at one of Brookfield Infrastructure’s European ports, which offset the increase in FFO.
The utilities business contributes approximately half of the partnership’s revenue and its returns are based on regulations and long-term contracts. Brookfield Infrastructure diversifys regulatory utilities structure to avoid any exposure to a single regulatory system and enable attractive returns on capital.
Brookfield Infrastructure recently announced participation in several strategic initiatives which will significantly increase the the scale of its transportation and utilities platforms. The partenership also agreed to issue units for $445,071,200 in gross proceeds to fund its investments. BIP is known for its investments in high quality projects and businesses which generate stable cash flows that appreciate in value over time. The company is currently considering a number of acquisitions in its key sectors. The partnership has signed definitive agreements to participate in the acquisition of a 60% interest in Obrascon Huarte Lain Brasil S.A. (“OHL Brasil”) for approximately $1.7 billion, with the expectation of generating stable cashflow with growth.
Stock performance:
The high dividend stock has accumulatively moved up 28.66%, to the current level of $35.64, as of the market close on August 13. The BIP stock is traded at an average daily volume of 284,849 shares. The stock trading 60.83% above its 52-week low of $22.16 and just 0.31% off its 52-week high of $35.75; and above its 200-day moving average of $33.42 and 200-day moving average of $30.03. Brookfield Infrastructure’s market cap is $6.56 billion. The high dividend stock has a P/E multiple of 48.36, well above its peer group average of 16.27; PEG ratio of 5.20, double its peer group average of 2.63; P/S multiple of 3.28, much higher than its peer group average of 1.41.
According to the data provided by FactSet Research, seven analysts averagely set a “Overweight” rating on the high dividend stock.