This High-Yield Stock Now Has Another $1 Billion in Its War Chest to Fuel Faster Growth
Global infrastructure giant Brookfield Infrastructure Partners (NYSE: BIP) has enjoyed a nice run up over the past year, rising more than 30%. Fueling that surge is a combination of election-related buying given its infrastructure focus, as well as the fact that it has delivered robust earnings growth thanks to a combination of organic expansion and acquisitions. That rally presented the company with an opportunity to cash in its high-flying valuation to sell equity, which it recently did in a transaction that will bring more than $1 billion into its coffers. The company plans to use that cash to fund its burgeoning backlog of growth projects as well as an expanding pipeline of acquisition opportunities. Here's a closer look at where the company will put that capital to work and what it means for investors.
Brookfield Infrastructure Partners ended last quarter with $2.6 billion of available liquidity, which it expected would increase over the next few quarters because it's in the process of monetizing some mature assets. That's a large pool to work with, especially when considering how active the company has been over the past several months. For example, last year it invested $850 million in organic growth projects, and it has already spent $1.3 billion this year to acquire a stake in a natural gas transmission company in Brazil from oil giant Petrobras (NYSE: PBR). Meanwhile, the company and its partner, natural gas pipeline giant Kinder Morgan (NYSE: KMI), just recently injected $400 million into their natural gas pipeline joint venture to help refinance that entity. However, with this week's equity issuance, the company now has about $3.5 billion of liquidity at its disposal, which provides it with a significant amount of funding for future growth initiatives.
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Source: Fool.com