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

Brookfield Infrastructure shares are down more than 15% YTD, pushing its dividend yield to 4.7% (vs Energy Transfer’s 7% after units rose >15% YTD). The company reported FFO per share growth of 10% in Q1 (up from 6% the prior year) and expects >10% annual FFO per share growth going forward, supported by $9B+ of growth capital projects and AI/data-center-related expansion. Management projects 6%–9% annual organic growth and 5%–9% dividend growth, alongside $1.5B of recent investments and continued value-enhancing acquisitions, making it the article’s preferred July energy buy.

Analysis

The market mechanism here is not “cheap income” so much as duration: BIP/BIPC trade like a hybrid of regulated infrastructure plus equity option on AI capex, so the current discount is mostly a rate/credibility problem, not a cash-flow problem. If long rates roll over, this name should re-rate faster than ET because its growth narrative is broader and less commodity-dependent; if rates stay sticky, the yield alone is unlikely to close the valuation gap.

Relative to ET, BIP/BIPC has a cleaner path to multiple expansion if management keeps converting backlog into FFO and the data-center segment proves it can earn acceptable returns without overleveraging the balance sheet. The second-order winner set extends beyond the stock itself: utilities, power equipment, and data-center infrastructure peers could benefit if Brookfield validates that private infrastructure capital can monetize AI demand directly, rather than only selling pipes and gas. The loser set is any asset-heavy, lower-growth yield vehicle that depends on yield-hungry investors and rising distributions to defend the multiple.

The main risk is that “AI infrastructure” becomes a catch-all story with a long lag to actual cash returns. Over the next 1-3 months, the catalyst is earnings guidance and any evidence that financing costs or project delays are slowing FFO growth; over 6-18 months, the thesis fails if data-center economics disappoint or acquisition returns dilute rather than compound. The contrarian view is that the selloff may be justified if investors are discounting a higher-for-longer rate environment and the market is too willing to capitalize every AI-related asset at a premium without proof of returns.

Key Decisions for Investors

• Favor a modest long BIPC/BIP position versus ET for the next 1-3 months: better upside if the market rotates toward lower-rate, quality-growth income names; risk is underperformance if gas/power demand keeps ET’s simpler cash yield in favor.
• Use the current weakness to initiate BIP/BIPC on a staggered basis rather than all at once; add only if the next quarterly update confirms >10% FFO growth and no deterioration in project returns.
• Pair trade idea: long BIP/BIPC, short a broad yield proxy or high-duration infrastructure basket, to isolate the rate-sensitive re-rating if Treasury yields ease; cut the trade if 10Y yields break higher or BIP/BIPC guidance softens.
• Watch for a reversal trigger in the next earnings cycle: any miss on data-center execution, backlog conversion, or dividend-growth guidance would argue for taking profits or avoiding the name despite the attractive headline yield.