This is The First Energy Stock I Plan to Buy in July (Hint: It's Not Energy Transfer)

Brookfield Infrastructure’s shares are down over 15% YTD, pushing its dividend yield to 4.7% (vs. Energy Transfer’s ~7% yield after a >15% unit surge). The firm reported 1Q FFO per share growth of 10% (vs. 6% last year) and projects >10% annual FFO per share growth going forward, supported by AI/data-center catalysts and more than $9B of growth projects backlog. It also expects 5% to 9% annual dividend growth going forward and continued acquisitions (about $1.5B of new investments over the past year).

Analysis

The setup is less about ‘cheap income’ and more about duration. BIP/BIPC can re-rate if the market starts believing its incremental capital is earning growth-like returns in AI-adjacent assets rather than low-ROIC utility-style spend; that is the real mechanism behind a higher multiple, not the headline yield. Relative to ET, the key edge is mix: BIP has more inflation-linked, diversified cash flow and a cleaner path to double-digit FFO/share if its backlog converts on time.

The counter-risk is that AI exposure is being priced as if all infrastructure dollars are created equal. If data-center projects stabilize slower than expected, or if rates stay high enough to keep equity duration discounted, BIP’s yield can look attractive while total return lags for quarters. ET is the cleaner ‘show-me’ asset: less optionality, but also less execution risk if power-demand growth disappoints.

Over 1-3 months, the catalyst is management proof on backlog conversion and any evidence that data-center/industrial gas investments are translating into accretive FFO rather than just larger asset base. Over 6-18 months, the thesis depends on whether BIP can compound above its cost of capital while preserving dividend growth; if not, the market will keep treating it like a bond proxy. The contrarian miss is that the recent selloff may simply be a rate reset, not a mispricing of intrinsic growth.

Key Decisions for Investors

• Long BIP/BIPC vs short ET on a 3-6 month horizon: express a growth-quality vs yield-compression view; target 8-12% relative outperformance if BIP sustains >10% FFO/share growth and ET remains capped by slower distribution growth.
• Add BIP on weakness only if the stock remains >10% below the level implied by a ~5% yield and management reiterates >10% FFO/share growth; if yield compresses without a corresponding guidance raise, the upside is likely already priced.
• Use ET as a hedge rather than a primary long: it is the cleaner income leg if AI power demand proves real, but trim if it rallies back to a sub-7% yield without new project disclosures.
• Watch item: BIP/BIPC earnings and backlog conversion. Falsify the bullish thesis if quarterly FFO/share falls back to high-single-digit growth or if data-center project returns are not disclosed as accretive within 1-2 quarters.