Brookfield Infrastructure Corporation (NYSE:BIPC) Pays A US$0.51 Dividend In Just Four Days

By
Simply Wall St
Published
November 24, 2021
NYSE:BIPC
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Brookfield Infrastructure Corporation (NYSE:BIPC) stock is about to trade ex-dividend in four days. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. In other words, investors can purchase Brookfield Infrastructure's shares before the 29th of November in order to be eligible for the dividend, which will be paid on the 31st of December.

The company's next dividend payment will be US$0.51 per share, and in the last 12 months, the company paid a total of US$2.04 per share. Last year's total dividend payments show that Brookfield Infrastructure has a trailing yield of 3.4% on the current share price of $59.37. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to investigate whether Brookfield Infrastructure can afford its dividend, and if the dividend could grow.

Check out our latest analysis for Brookfield Infrastructure

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Brookfield Infrastructure reported a loss after tax last year, which means it's paying a dividend despite being unprofitable. While this might be a one-off event, this is unlikely to be sustainable in the long term. Considering the lack of profitability, we also need to check if the company generated enough cash flow to cover the dividend payment. If Brookfield Infrastructure didn't generate enough cash to pay the dividend, then it must have either paid from cash in the bank or by borrowing money, neither of which is sustainable in the long term.

Click here to see how much of its profit Brookfield Infrastructure paid out over the last 12 months.

historic-dividend
NYSE:BIPC Historic Dividend November 24th 2021

Have Earnings And Dividends Been Growing?

Companies that aren't growing their earnings can still be valuable, but it is even more important to assess the sustainability of the dividend if it looks like the company will struggle to grow. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Brookfield Infrastructure was unprofitable last year, although, we can see that at least its loss per share reduced by 64% on the previous year.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past two years, Brookfield Infrastructure has increased its dividend at approximately 2.5% a year on average.

Get our latest analysis on Brookfield Infrastructure's balance sheet health here.

Final Takeaway

Is Brookfield Infrastructure an attractive dividend stock, or better left on the shelf? We're a bit uncomfortable with it paying a dividend while being loss-making. However, we note that the dividend was covered by cash flow. In summary, it's hard to get excited about Brookfield Infrastructure from a dividend perspective.

However if you're still interested in Brookfield Infrastructure as a potential investment, you should definitely consider some of the risks involved with Brookfield Infrastructure. Be aware that Brookfield Infrastructure is showing 4 warning signs in our investment analysis, and 2 of those are a bit concerning...

If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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Simply Wall St is focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of data scientists and multiple equity analysts with over two decades worth of financial markets experience between them.