• 4 minutes Pompeo: Aramco Attacks Are An "Act Of War" By Iran
  • 7 minutes Who Really Benefits From The "Iran Attacked Saudi Arabia" Narrative?
  • 11 minutes Trump Will Win In 2020
  • 15 minutes Experts review Saudi damage photos. Say Said is need to do a lot of explaining.
  • 1 min Ethanol, the Perfect Home Remedy for A Saudi Oil Fever
  • 4 hours Hong Kong protesters appeal to Trump for support.
  • 14 hours Europe: The Cracks Are Beginning To Show
  • 16 hours Iran Vows Major War Even If US Conducts "Limited Strikes"
  • 1 hour Memorize date 05/15/2018 cause Huawei ban is the most important single event in world history after 9/11/2001.
  • 1 hour Millennials: A boil on the butt of the work ethic
  • 2 hours A little something for all you Offshore swabbies
  • 11 hours Ban Fracking? What in the World Are Democrats Thinking?
  • 15 hours LA Times: Vote Trump out in 2020 to Prevent Climate Apocalypse
  • 13 hours When Trying To Be Objective About Ethanol, Don't Include Big Oil Lies To Balance The Argument
  • 4 hours US and China are already in a full economic war and this battle for global hegemony is a little bit frightening
  • 46 mins Saudi State-of-Art Defense System looking the wrong way. MBS must fire Defense Minister. Oh, MBS is Defense Minister. Forget about it.
  • 1 hour Shale profitability
  • 24 hours Yawn... Parliament Poised to Force Brexit Delay Until Jan. 31
  • 11 hours Let's shut down dissent like The Conversation in Australia

A Boring Stock With Potential

Despite my natural optimism, I find it hard to shake the feeling that financial markets are heading towards a tough time. It is not that there is any big crisis obviously on the horizon, just a series of little things that are causing worry. The Middle East is in its usual unstable state, the Chinese economy is maturing and growth is slowing as a result, the U.S. economy remains stubbornly slow with rate hikes on the horizon should it improve, and then of course there is Greece.

It is most likely that none of these elements will have a profound effect in isolation but the combination of them, or rather the market’s attention to them, seems to have put the brakes on for now. There have been good days for sure, but stocks in particular seem to be sensitive to news, and when traders have this many things to worry about it is easy to find a reason to sell. We are bouncing around the highs, which leaves us with a cap on the upside and some downside risk. It may be time to get a little boring and look for reliable cash flow rather than rapid growth.

That is why I have been looking at infrastructure stocks. Roads, bridges, pipelines, power grids and utilities are generally considered to offer little in the way of growth prospects, but they do fit the bill when it comes to reliable cash flow. In some cases, though, with a judicious use of that cash for acquisitions, pretty good growth can still be achieved in the space. Take Brookfield Infrastructure Partners (BIP) for example. Over the last five years the stock has nearly tripled; not bad for a supposedly low growth business.

(Click to enlarge)

It seems that Brookfield is not done yet, either. They have expressed interest in the privatization of Australian ports and power lines and have been aggressively buying struggling companies around the globe. That is why analysts are forecasting a consensus growth rate of 22 percent in the coming year for the partnership. That would be a great growth rate in any stock, but when combined with the 4.7 percent yield that BIP offers, the stock starts to look like a must own.

Interestingly, as a U.S. rate hike draws nearer and anything that derives value from yield has fallen, Brookfield has held up remarkably well. This is in part down to the growth story, but also to the fact that BIP has a history of an increasing payout. That is sustainable in cash rich infrastructure businesses so the prospect of a rate rise hasn’t scared investors. Even if rates do go up this year, as most expect, the Fed has made it clear that they will do so gradually. Indeed, on Wednesday Janet Yellen made that clear once again, admonishing the market for focusing on the timing of a rate rise rather than the trajectory.

That combination of good potential for further growth and resistance to the negative effects of a rate rise is why, even though it may seem like a strange time to be buying into a yield driven partnership, BIP looks like a good bet for those who, like me, are looking to put a little boredom into their portfolio.

Oilprice - The No. 1 Source for Oil & Energy News