This Might Be The Next Stock-Split You're Looking For After Amazon
Updated: Jun 8
The train has already boarded and is on its way out of town. You missed out on Amazon.com's (AMZN 1.99 percent) 20-for-1 stock split. The stock of the internet behemoth has dropped significantly since Friday's market closure.
Of course, there's still time to invest in Amazon. Long-term prospects for the firm are still bright. However, you won't have to wait long if you want to fully capitalize on the projected stock split wave. Following Amazon, here's the next stock split to purchase.
Thanks to its capital recycling approach and an ongoing infrastructure super-cycle, the company's growth prospects appear to be bright.
A Less-Publicized Stock Split On The Way
Investors were quite interested in Amazon's stock split. Alphabet (GOOG 2.13 percent) (GOOGL 1.99 percent) and Tesla (TSLA 1.60 percent) have both announced upcoming stock splits. However, a less well-publicized stock split is coming up soon.
On June 10, Brookfield Infrastructure (BIP 0.77%) (BIPC -1.58%) will undertake a 3-for-2 stock split. Technically, there will be two stock splits in the near future. BIP stands for Brookfield Infrastructure Partners, whereas BIPC stands for Brookfield Infrastructure Corporation. They do, however, operate in the same industry. At the same moment, both stocks will have identical splits.
Brookfield Infrastructure, I previously argued, is the ideal stock-split investment given the crazy market we've seen so far this year. Part of my rationale is based on performance. Both
None of the other well-known stock split equities have performed as well as Brookfield Infrastructure. Amazon and Alphabet have lost more than 20% of their value this year. Tesla's stock has dropped by more than 30%.
The Desire Of Each Investor
Brookfield Infrastructure is likely to appeal to income-seeking investors. Since 2009, the company's distribution (akin to a dividend) has grown at a compound annual growth rate (CAGR) of 10%.
The current dividend yield for limited partnership BIP is about 3.5 percent. The dividend yield on BIPC is just over 3%. The differing yields are due to the two stocks' differing share values, but the payout amount is the same for each.
You shouldn't have to worry about Brookfield Infrastructure's distributions being reliable. Cell towers, data centers, natural gas pipelines, power transmission lines, railroads, and other assets are among the company's holdings. These infrastructure assets provide a consistent cash flow month after month. Around 90% of the company's cash flow is regulated or contractual, with around 70% of it being inflation-indexed.
Brookfield Infrastructure aims to boost its payout by between 5% and 9% per year in the long run. Given the strength of the company's operation, I don't believe that target will be too tough to attain.
Promising Development Opportunities!
However, this isn't simply a stock for income investors to enjoy. Brookfield Infrastructure, on the other hand, has a promising future.
Since 2017, the company's revenue has grown at a CAGR of 13%. Brookfield Infrastructure's capital recycling strategy is one of the keys to its expansion. It invests in infrastructure assets for a profit. The corporation then improves operations to increase the value of such assets. Brookfield Infrastructure frequently sells assets as they age.
A super-cycle in infrastructure is now occurring. The United States is spending heavily on infrastructure improvements. Global data consumption is increasing, necessitating the construction of more telecom towers and data centers. This super-cycle should immediately benefit Brookfield Infrastructure.
Expectations Are High
Brookfield Infrastructure's imminent stock split is unlikely to be a significant catalyst. With share prices far below $75, both of its stocks are already inexpensive.
While investors shouldn't hold high hopes for the stock split, Brookfield Infrastructure's prospects are a different story. Over the long term, both BIP and BIPC might produce massive total returns.