Tuesday, February 15, 2011

A Partnership With A Generous Yield

[Brookfield Infrastructure Partnership is a limited partnership that was spun off from Brookfield Asset Management in 2008. Brookfield Infrastructure Partnership owns and operates all of the infrastructure assets for Brookfield Asset Management including its energy, transportation, electricity transmission systems, timberlands, and social infrastructure.] [
The majority of the company’s assets are split between investments in utilities, transportation infrastructure, and timber. The remaining portion of the company’s assets are invested in social infrastructure projects. The company’s owns and manages assets in Australia, Canada, Chile, Europe, New Zealand, the United Kingdom, and the United States.
The stock is currently yielding 4.8%. The dividend is very appealing since Brookfield is currently paying out a dividend of $1.10 per share despite earnings being below this level. The payout ratio is a concern since the company is only expected to earn 64 cents for the full year.
Brookfield recently reported fourth quarter earnings Friday. The results were disappointing as the company missed earnings expectations handedly. Earning per share was 14% below expectations. Funds from operations came in at 39 cents a unit.
Earning per share is pegged to come in at 16 cents per share next quarter. The company has historically traded at a multiple of 16.  Right now, shares are trading at about twice that number with a P/E of 31. Shares are currently trading at 1.2 times book value.
Although the stock is very attractive because of the yield, shares of Brookfield look fully valued right now.
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