Brookfield Infrastructure Partners (NYSE:BIP) pays its investors very well. The stock dividend currently yields 4.3%, which is double the market's average. Furthermore, the company believes it can increase that payout by 5% to 9% annually over the long term because of the embedded organic growth of its current portfolio of infrastructure assets. While that forecast might seem to be optimistic, the following three factors should melt away any worry investors have in the company's ability to continue paying a growing distribution.

No. 1: A low-risk business model supports the current payout

One of the hallmarks of Brookfield Infrastructure Partners is the stability of its cash flow, driven by the fact that contractual obligations and regulated structures underpin 93% of its funds from operations (FFO). The company further solidifies its cash flow by owning a diverse set of 33 businesses. Because of that, no more than 27% of its FFO comes from any one operating group. Meanwhile, 65% of its underlying earnings have no volume risk, which means it can bank on that cash flow even if times get tough. That baseline volume number is worth noting because it roughly matches with the company's payout policy to distribute 60%-70% of annual FFO to investors, which should increase investors' confidence in the long-term sustainability of the payout.

The silhouette of a cell phone tower shot against the setting sun.

Image source: Getty Images.

No. 2: The balance sheet is strong and liquid

Brookfield Infrastructure Partners complements its steady cash flow with a healthy balance sheet. For example, the company currently has an investment grade credit rating, which it plans to maintain for the long term. That said, it primarily finances businesses on an individual basis, which it underwrites to investment-grade credit metrics. This financing strategy reduces risk at the corporate level.

Meanwhile, the company has ample liquidity at the corporate level to support growth and opportunistic investments. It ended last quarter with $2.6 billion of cash and availability under its credit facility, which should increase in the coming months because of some asset sales it has in the pipeline. Meanwhile, the company and its partner Kinder Morgan (NYSE:KMI) recently finished refinancing their natural gas pipeline joint venture in North America, which not only cut interest expenses but eliminated Brookfield's last near-term debt maturity. As a result, it has no major debt maturities within the next five years, which limits the impact of rising interest rates on its financial situation.

No. 3: It has increased visibility into future growth

One of the drivers of Brookfield's rapid expansion over the years has been its ability to buy infrastructure assets for a good value. For example, earlier this year the company closed the acquisition of a natural gas transmission business in Brazil from oil giant Petrobras (NYSE:PBR). The company was able to acquire this business at an excellent price because of the financial and political troubles in Brazil, as well as Petrobras' internal issues. That deal helped move the needle in the second quarter where FFO jumped 28% versus the prior year period.

That said, one of the other fuels of Brookfield Infrastructure Partners' strong second-quarter showing was the $850 million of expansion projects that entered service over the past year, which combined to drive 10% organic growth in FFO on a constant currency basis. The good news is that there's plenty more growth coming down the pipeline given that the company's backlog now sits at $2.4 billion, which is up from $2 billion at the start of the year. Furthermore, it's currently pursuing $1.5 billion to $2 billion of additional organic growth projects that it could potentially sanction over the next year. These include nearly $300 million of projects in the North American natural gas pipeline business it co-owns with Kinder Morgan.

Welder on a construction site.

Image source: Getty Images.

That said, these expansion projects are only part of the growth story. Overall, Brookfield expects its current backlog of projects to support 2% to 3% annual FFO growth per unit over the next few years with the rest of the growth coming from inflationary price increases (3%-4%) and volume upside from GDP growth (1%-2%). Add it up, and this trio of factors should fuel 6% to 9% organic growth in FFO, which would, in turn, drive the 5% to 9% annual distribution increases.

However, that's not to say Brookfield Infrastructure Partners has forsaken the acquisition market. Quite the contrary since it already has a $200 million deal in place to buy a portfolio of communication towers in India and a small deal to invest in a water infrastructure business in Peru. Beyond those deals, the company recently noted that building its water business is a priority, while at the same time it continues to pursue value-based acquisitions to expand its global footprint. Overall, the company expects to deploy more than the $500 million to $1 billion it traditionally spends per year on acquisitions over the next few years because of the strength of its transaction pipeline.

A low-risk way to earn high returns

With the stock market seemingly reaching a new all-time high on a daily basis, there are growing worries that we could be in for some rough times ahead. However, there doesn't appear to be any reason for investors to worry about Brookfield Infrastructure Partners' future since it shouldn't have any problem continuing to pay a growing distribution, which should drive healthy annual returns for investors. Meanwhile, if there is a sell-off that takes Brookfield down with it, that event would be a great opportunity to buy more of this excellent company at an even better value.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.