Brookfield Infrastructure stock rating reiterated at Outperform by RBC

Investing.com - RBC Capital has reiterated an Outperform rating on Brookfield Infrastructure Partners (NYSE:BIP), describing it as "one of the most under-appreciated stocks" in the Utilities sector. According to InvestingPro data, BIP currently trades at $31.35 with a dividend yield of 5.52%, while maintaining its position as a prominent player in the Multi-Utilities industry.

The firm highlighted BIP’s track record of delivering unitholder value through organic growth and capital recycling, noting the company has achieved 14% FFO/unit and 9% distributions per unit compound annual growth rates since 2009. InvestingPro data reveals BIP has raised its dividend for 15 consecutive years, with recent dividend growth of 6.17%.

RBC pointed to BIP’s portfolio resilience through various rate cycles since its 2008 trading debut, with 85% of its funds from operations being protected or indexed to inflation and either contracted or regulated.

The company is positioned to deliver 6-9% organic FFO/unit growth annually, potentially reaching 10%+ over the long term with capital recycling initiatives, which RBC describes as the highest among its Canadian Energy Infrastructure coverage.

From a valuation perspective, RBC noted BIP units trade at an elevated cash flow yield of approximately 11.5% on an FFO basis, compared to a 9% average since 2011, with a yield spread to the 10-year U.S. Treasury of 700-750 basis points, which is 100 basis points above average.

In other recent news, Brookfield Infrastructure Partners reported a significant revenue surprise in its second-quarter earnings for 2025. The company achieved actual revenue of 5.43 billion USD, which far exceeded the forecast of 1.95 billion USD, resulting in a 178.46% positive surprise. However, the earnings per share (EPS) did not meet expectations, with an actual EPS of -0.03 USD compared to the anticipated 0.3241 USD, leading to a negative surprise of 109.26%. Despite the shortfall in EPS, the company’s stock showed resilience. These developments are important for investors who closely monitor earnings and revenue performance. Analysts and investors might find the revenue figures particularly noteworthy given the substantial deviation from projections. As Brookfield Infrastructure Partners navigates these financial results, market watchers will be interested in how the company addresses the earnings shortfall in future quarters.

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