Brookfield Infrastructure Corporation (BIPC.TO)

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Hi Dan/Mat,
In the acquisition process of IPL (Interpipeline), I’m now allocated 0.23 share of BIPC against 1 share of IPL I was holding. That is approx 25% down compared to my purchase price of IPL shares.
What is your view on BIPC share moving forward. I noticed that this is continuously declining in past few weeks.

Is this company also in energy pipe sector?
Is it at present a good valuation of share to add more if I decide while share price is going south?

Appreciate your review and comments for a longterm share price growth and dividend payouts.

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Asked on November 22, 2021 1:58 pm
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Private answer

We like Brookfield Infrastructure. It is a solid company and it invests in many different infrastructure projects that includes energy storage and distribution. Only 28% of FFO comes from pipes, the rest comes from data transmission/distribution, toll roads, regulated utilities, rail , etc. This is not a one-trick pony. It is almost an ETF on the entire infrastructure space. The company is constantly buying and selling assets but Brookfield is one of the best in the industry in terms of capital allocation. They picked up IPL on the cheap and will likely reap the rewards once Heartland is online.

It also has a targeted distribution growth rate of 5-9% - which it has never missed. Higher interest rates are likely to be a headwind for the company, as with most utility/pipeline companies which have high CAPEX. This is likely why we are seeing weakness but the entire sector is being impacted to various degrees. The good news is that BIP should be able to offset this with a healthy growth profile in the high single-digits.

I'd have no problems with BIP as a long term hold.

Mat

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Posted by Mathieu Litalien
Answered on November 23, 2021 5:59 am