Brookfield Infrastructure (BIP 0.49%) (BIPC -1.87%) just lately reported sturdy fourth-quarter and full-year outcomes. That enabled the worldwide infrastructure large to extend its dividend by one other 6%. It has now grown its payout for 14 straight years.

Brookfield sees extra progress forward. This is a have a look at final yr’s sturdy displaying and what it sees coming down the pipeline for 2023 and past.

One other glorious yr

Brookfield Infrastructure delivered glorious ends in the fourth quarter, rising its funds from operations (FFO) to a document $556 million, or $0.72 per share (up 14.4% total and 10.% on a per-share foundation). That helped drive FFO to $2.1 billion, or $2.71 per share for the total yr — a 20% improve from 2022 or 12% on a per-share foundation — with equal contributions from natural progress drivers and acquisitions. 

The corporate grew FFO throughout every of its segments:

Knowledge supply: Brookfield Infrastructure Companions. Chart by the creator. 

Brookfield Infrastructure’s midstream phase was the biggest progress driver as FFO rocketed 51%. The first gas supply was the acquisition of Inter Pipeline within the fourth quarter of 2021. Brookfield’s midstream operations additionally benefited from increased commodity costs, which elevated utilization and fueled increased market-sensitive revenues.

Brookfield’s transportation phase additionally delivered sturdy outcomes final yr, rising its FFO by 13%. The first driver was inflationary fee will increase throughout its companies, increased volumes, and the completion of $400 million of enlargement tasks. These drivers greater than offset the sale of its North American container terminal final yr.

The utilities phase grew its FFO by 5% final yr. It additionally benefited from inflationary fee will increase, which boosted earnings by 8%. As well as, Brookfield accomplished $485 million of enlargement tasks and benefited from two just lately accomplished Australian utility acquisitions. These energy sources helped offset increased borrowing prices from elevated rates of interest and debt ranges and the sale of its North American district power enterprise in 2021.

Lastly, Brookfield’s information infrastructure phase delivered a slight FFO improve. The enterprise unit benefited from rising buyer utilization and inflationary fee escalators. That helped offset overseas alternate headwinds.

A have a look at what’s forward for Brookfield Infrastructure

Brookfield secured and has closed $2.9 billion of investments throughout 5 transactions over the previous yr. They will contribute to the corporate’s ends in 2023. That incremental revenue, together with its natural progress drivers of inflationary fee will increase, enlargement tasks just like the ramp-up of its Heartland facility in Canada, and quantity progress ought to drive 12% to fifteen% FFO per share progress this yr.

In the meantime, the corporate continues to recycle capital to boost its progress profile. Brookfield just lately closed two asset gross sales, elevating $400 million to spice up its company liquidity to $4.3 billion. It is working to shut the sale of its India toll highway portfolio and its 50% owned port in Australia, which it expects to finish within the first half of this yr and lift $260 million. It just lately launched its subsequent section of asset gross sales. The corporate expects to lift a complete of $2 billion from promoting property this yr. 

These proceeds will give Brookfield the funds to make new investments. It has already replenished its funding pipeline. It is evaluating a number of company carve-out transactions (i.e., shopping for property or enterprise items from a big company) and reviewing public-to-private alternatives to amass publicly traded corporations. These offers ought to speed up Brookfield’s progress fee over the approaching years. It sees natural progress above its 6% to 9% goal due to elevated inflation and its sturdy capital mission backlog, with acquisitions enhancing that outlook.

An amazing shopping for alternative

Like most corporations, Brookfield’s inventory value has been underneath stress over the previous yr. Nonetheless, as its 2022 outcomes present, it is delivering sturdy outcomes. With extra progress forward, the corporate seems like a compelling funding alternative, particularly given its rising and enticing dividend (it yields greater than 3%). These elements set traders as much as doubtlessly earn sturdy complete returns from Brookfield within the coming years.