This Nearly 5%-Yielding Dividend Stock's Growth Accelerates as Its AI Infrastructure Investments Pay Off

Brookfield Infrastructure's (NYSE: BIPC)(NYSE: BIP) earnings increased by 10% in the first quarter, a meaningful acceleration from the 6% growth it delivered last year. A major catalyst was its investments to support the build-out of AI infrastructure.

Here's a closer look at the company's strong quarter and robust growth profile, both of which support Brookfield's ability to continue increasing its high-yielding dividend (currently 4.9%).

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A strong start to the year

Brookfield Infrastructure generated $709 million, or $0.90 per share, of funds from operations (FFO) in the first quarter, a 10% increase from last year. The global infrastructure operator benefited from solid organic growth, which came in at the high end of its 6% to 9% target range, driven by higher inflation-linked revenues, strong utilization in its midstream segment, and the commissioning of over $1.7 billion in growth capital projects. Brookfield also benefited from completing $1.4 billion of new investments over the past year. Those growth drivers more than offset the impact of $3.6 billion of asset sales used to fund its growth initiatives.

Brookfield's data infrastructure segment provided the biggest boost, growing its FFO by 46% to $149 million. It benefited from the acquisition of its U.S. bulk fiber network, organic growth in its data storage business, and the commissioning of over 200 megawatts of new data centers in the past year. Brookfield's energy midstream segment also delivered strong results, growing its FFO by 12% to $190 million. It benefited from strong utilization and customer activity across its portfolio, as well as from the acquisition of a U.S. refined pipeline system, which fully offset the lost contribution from the sale of its U.S. gas pipeline system last year.

Adding more growth drivers

Brookfield continued to execute its growth strategy in the quarter. Forming strategic capital partnerships is an increasingly important aspect of its strategy. During the quarter, it established a new framework with a leading global investment-grade original equipment manufacturer (OEM) to launch an exclusive leasing platform for large, mission-critical industrial equipment. The company expects to deploy up to $375 million by providing long-term leasing solutions, initially for equipment in data centers.

That deal follows a strategic partnership with Bloom Energy to invest up to $5 billion in installing up to 1 gigawatt of behind-the-meter power solutions at data centers. Brookfield secured another $430 million of projects during the quarter, bringing the total commitment to $1.6 billion. Brookfield will invest about $60 million of this capital. Due to strong demand, Brookfield sees potential to expand the platform in the coming months.

Meanwhile, the company remains on track to close its acquisition of Clarus, a leading gas infrastructure utility in New Zealand ($70 million net investment). The company is also continuing to sell mature assets to fund its continue growth, securing nearly $1 billion of asset sales this year. The company's capital recycling strategy continues to drive faster earnings growth.

High-powered total return potential

Brookfield Infrastructure's growth rate has reaccelerated, driven by its investments in AI infrastructure. The company's strategic partnerships to support that build-out should continue driving robust growth in the coming years, giving Brookfield plenty of fuel to continue increasing its high-yielding dividend. That income-and-growth combination positions it to deliver robust total returns, making it a great way to play the AI infrastructure boom.

Matt DiLallo has positions in Brookfield Infrastructure and Brookfield Infrastructure Partners. The Motley Fool has positions in and recommends Bloom Energy. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.