David Bahnsen, The Bahnsen Group CIO, recently talked on CNBC about the importance of dividend growth stocks and said the “ability” to sleep at night that these stocks give to investors comes from their strong track record. He believes dividend growth “immunizes” investors from volatility.
“I think you get some of that ability to sleep at night if you’re not so reliant on expensive things getting more expensive. That’s really the key, is you already have the things you’re talking about — top-down macro uncertainty, tariff policy, geopolitics, things like that. But when you combine that with high PEs that you just need to get higher in order to see your investments do well, I think that becomes problematic. Dividend growth immunizes investors from some of that.”
Bahnsen then talked about why he loves Brookfield Infrastructure Corp (NYSE:BIPC) as a dividend growth play:
“That’s a name that people probably have not heard as much about, but it’s investing in data center pipelines, a lot of hard assets, real infrastructure build that are cash flow generative. It’s very well-managed. More famously recently, the new president in Canada was a director there at BIPC. But I mean, you’re talking about major US and North American assets with good dividend yield, and it’s going to be growing that yield high single digits.”
Baron Real Estate Income Fund made the following comment about Brookfield Infrastructure Corporation (NYSE:BIPC) in its Q4 2022 investor letter:
“Brookfield Infrastructure Corporation (NYSE:BIPC) is one of the largest globally diversified owners and operators of high-quality infrastructure assets in the world. Core infrastructure investments include utilities, data centers, wireless towers, energy, and transportation (ports and rails). The company, with its well-capitalized balance sheet and deep and experienced management team, is well positioned to capitalize on several years of infrastructure investment opportunities around the world, which should enhance future growth.
We expect Brookfield Infrastructure’s earnings (funds from operations) to grow by more than 10%, yet its shares are valued at only 10.8 times earnings. We also expect its 3.5% dividend to be higher in the year ahead.”
While we acknowledge the potential of BIPC as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
Hedge Fund Resource Center