Three Days Left Until Brookfield Infrastructure Corporation (NYSE:BIPC) Trades Ex-Dividend

It looks like Brookfield Infrastructure Corporation (NYSE:BIPC) is about to go ex-dividend in the next three days. Ex-dividend means that investors that purchase the stock on or after the 25th of February will not receive this dividend, which will be paid on the 31st of March.

Brookfield Infrastructure's next dividend payment will be US$0.51 per share. Last year, in total, the company distributed US$2.04 to shareholders. Based on the last year's worth of payments, Brookfield Infrastructure stock has a trailing yield of around 3.3% on the current share price of $61.66. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! As a result, readers should always check whether Brookfield Infrastructure has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for Brookfield Infrastructure

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. 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. With the recent loss, it's important to check if the business generated enough cash to pay its dividend. If cash earnings don't cover the dividend, the company would have to pay dividends out of cash in the bank, or by borrowing money, neither of which is long-term sustainable. Luckily it paid out just 11% of its free cash flow last year.

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

Have Earnings And Dividends Been Growing?

Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time.

Unfortunately Brookfield Infrastructure has only been paying a dividend for a year or so, so there's not much of a history to draw insight from.

Remember, you can always get a snapshot of Brookfield Infrastructure's financial health, by checking our visualisation of its financial health, here.

The Bottom Line

From a dividend perspective, should investors buy or avoid Brookfield Infrastructure? 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. To summarise, Brookfield Infrastructure looks okay on this analysis, although it doesn't appear a stand-out opportunity.

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. For instance, we've identified 5 warning signs for Brookfield Infrastructure (2 are a bit unpleasant) you should be aware of.

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.

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This article by Simply Wall St is general in nature. 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.
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