Dividend Increase | Brookfield Infrastructure Partners (BIP) - Roth IRA

Dividend | Dividend Growth | Financial Independence | Freedom | Passive Income
Getting a pay raise while sitting on the couch?  Sign me up!  Thanks BIP for the dividend increase!
There's an old Chinese proverb that says "the best time to plant a tree was 20 years ago, the next best time is now".  The reason for this is that it takes time for a tree to grow and prosper and for you to start reaping its benefits.  Dividend growth investing is much the same way.  It takes consistent saving and investing as well as time and patience to let the power of dividend growth take hold.

That's why one of my favorite things is when one of the companies I own decides to pay out more in dividends.  You mean I get a pay raise just for owning a small piece of a company?  Not going and doing R&D for new products or technology.  Not selling any products.  Not managing any employees or inventory.  Not making sales calls.  All I had to do was have the foresight to invest some of my savings in excellent companies.  

On February 10th the Board of Directors at Brookfield Infrastructure Partners (BIP) approved an increase to the quarterly dividend payment.  The dividend was increased from $0.5025 up to $0.5375.  That's a solid 7.0% increase.  Shares currently yield 3.89% based on the new annualized payout.  Brookfield Infrastructure Partners is a Dividend Contender with 12 consecutive years of dividend increases.

The newly increased dividend will be payable on March 31st to shareholders of record as of February 28th.

Since I own 37.597 shares of BIP in my Roth IRA, this raise increased my forward 12-month dividends by $5.26.  This is the 1st dividend increase I've received from BIP since initiating a position in August 2019.  



A full screen version of this chart can be found here.

Of the 12 1-year periods starting in 2008, BIP's annual dividend growth has ranged from 3.7% to 20.0% with an average of 11.5% and a median of 11.0%.

Of the 8 rolling 5-year periods during BIP's dividend growth streak, annualized dividend growth has looked quite impressive ranging from 8.8% to 14.3% with an average of 11.6% and a median of 11.8%.

The 1-, 3-, 5- and 10-year rolling dividend growth rates since 2008 can be found in the following chart.  




A full screen version of this chart can be found here.

For dividend yield theory I consider the fair value range to be the forward dividend yield +/- 10% compared to the 5 year moving average, the under/over value area to be to between 10%-20% deviation from the average and significant over/under value are greater than a 20% deviation from the average.


A full screen version of this chart can be found here.

Brookfield Infrastructure Partners' 5-year average forward dividend yield is 4.74% which corresponds to a share price of $45.36 based on the newly raised dividend.

I consider the fair value range based on dividend yield theory to be the 5-year moving average yield +/- 10%.  That gives a fair value range of $41 - $50 suggesting that shares are richly valued at this time.


  




Wrap Up

This raise increased my forward dividends by $5.26 with me doing nothing.  That's right, absolutely nothing to contribute to their operations.  Based on my Roth IRA's current yield of 2.70% this raise is like I invested an extra $195 in capital.  Except that I didn't!  One of the companies I own just decided to send more cash my way.  

That's how you can eventually reach the crossover point where your dividends received exceed your expenses.  That's DIVIDEND GROWTH INVESTING AT WORK!  The beauty of the dividend growth investing strategy is that you build up your dividends through fresh capital investment as well dividend increases from the companies you own.

I've now received 1 raise from 1 of the 10 companies in my Roth IRA increasing my forward-12 month dividends by $5.26.

My FI Portfolio's forward-12 month dividends are $7,988.52.  Including my FolioFirst portfolio's forward dividends of $100.94 brings my total taxable accounts dividends to $8,089.46.  My Roth IRA's forward 12-month dividends increased to $656.65.  My Rollover IRA's forward dividends are $2,391.19.  Across all accounts I can expect to receive $11,137.30 in dividends over the next year.

I've also started compiling dividend data on many of the companies that I own or would like to own.  Brookfield Infrastructure Partners' can be found here which includes the dividend history (as far back as I can find without spending hours hunting it down), rolling dividend growth rates and dividend yield theory.  To see other companies that I've already gathered the data on you can check out the Dividend Companies page.  Check it out and let me know what you think.

Do you own shares of BIP?  What about any other partnerships in the Brookfield family?

Please share your thoughts below.

Comments

  1. HOW I GOT MY LOAN FROM THIS GREAT COMPANY

    Hello my dear people, I am Linda McDonald, currently living in Austin Texas, USA. I am a widow at the moment with three kids and i was stuck in a financial situation in April 2018 and i needed to refinance and pay my bills. I tried seeking loans from various loan firms both private and corporate but never with success, and most banks declined my credit ,do not full prey to those hoodlums at there that call them self-money lender they are all scam , all they want is your money and you well not hear from them again they have done it to me twice before I met Mr. David Wilson the most interesting part of it is that my loan was transfer to me within 74hours so I will advise you to contact Mr. David if you are interested in getting loan and you are sure you can pay him back on time you can contact him via email……… (davidwilsonloancompany4@gmail.com) No credit check, no cosigner with just 2% interest rate and better repayment plans and schedule if you must contact any firm with reference to securing a loan without collateral then contact Mr. David Wilson today for your loan

    They offer all kind of categories of loan they are

    Short term loan (5_10years)
    Long term loan (20_40)
    Media term loan (10_20)
    They offer loan like
    Home loan............., Business loan........ Debt loan.......
    Student loan.........., Business startup loan
    Business loan......., Company loan.............. etc
    Email..........( davidwilsonloancompany4@gmail.com)
    When it comes to financial crisis and loan then David Wilson loan financial is the place to go please just tell him I Mrs. Linda McDonald direct you Good Luck.......................

    ReplyDelete

Post a Comment