The train has already left the station. If you were hoping to buy Amazon.com shares (1.99% AMZN) before the company’s 20 per cent stock split, you’re too late. The shares of the Internet giant are now much cheaper than at the close of the market on Friday.
Of course, it’s not too late to invest in Amazon yet. The long-term prospects of the company are still very good. But if you have the heart set on trying to ride the full-blown wave from an action division, you won’t have to wait long. Here are the next stocks divided into stocks to buy after Amazon.
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A less publicized division of shares along the way
Amazon’s stock division received a lot of attention from investors. The next stock divisions of Alphabet (GOOG 2.13%) (GOOGL 1.99%) and Tesla (TSLA 1.60%) have also been of interest. However, there is a less publicized division of shares on the way very soon.
Brookfield Infrastructure (BIPC 0.77%) (BIPC -1.58%) plans to hold a 3 by 2 share split on June 10th. Technically, two stock divisions are approaching. Brookfield Infrastructure Partners is listed on the BIP ticker, while Brookfield Infrastructure Corporation is listed on the BIPC ticker. However, they share the same underlying business. And both actions will have identical divisions at the same time.
I recently argued that Brookfield Infrastructure is the perfect wildlife stocking stock we’ve experienced so far this year. My reasoning is based in part on performance. Both Brookfield Infrastructure shares are in positive territory by 2022 and easily outperform the S&P 500.
None of the other highly publicized stock splitting actions are working as well as Brookfield Infrastructure. Shares of Amazon and Alphabet have dropped more than 20% so far. Shares of Tesla have fallen more than 30%.
The dream of an income investor
If you are an investor looking for income, you will probably love Brookfield Infrastructure. The company has increased its distribution (equivalent to a dividend) at a compound annual growth rate (CAGR) of 10% since 2009.
The dividend yield of the limited partnership BIP is currently at almost 3.5%. BIPC’s dividend yield is just over 3%. The different returns are the result of the different share prices of the two shares, but the distribution amount is the same for both.
You don’t have to worry about the reliability of Brookfield Infrastructure distributions. The company’s portfolio includes cell towers, data centers, natural gas pipelines, power transmission lines, railroads and more. These infrastructure assets generate a solid cash flow month after month. About 90% of the company’s cash flow is regulated or contracted with about 70% indexed to inflation.
Brookfield Infrastructure expects to increase its distribution by between 5% and 9% per year over the long term. I don’t think this goal is too difficult to achieve given the strength of the company’s business.
Solid growth prospects as well
However, this is not just a value that income investors will like. Brookfield Infrastructure also has strong growth prospects.
The company has generated a 13% revenue CAGR since 2017. A key to this growth is Brookfield Infrastructure’s capital recycling strategy. Purchase infrastructure assets at attractive valuations. The company then increases the value of these assets by improving operations. And when the assets mature, Brookfield Infrastructure often sells them.
An infrastructure supercycle is underway. The United States is investing in significant infrastructure improvements. Global data usage is skyrocketing, increasing the need for more telecommunications towers and data centers. Brookfield Infrastructure should directly benefit from this supercycle.
High expectations
The impending stock split is unlikely to provide a major catalyst for Brookfield Infrastructure. Both stocks are already affordable with stock prices well below $ 75.
But while investors shouldn’t have high expectations for the stock split, it’s a different story for Brookfield Infrastructure opportunities. BIP and BIPC could offer huge overall long-term profitability.