Despite a long track record of success, Brookfield Infrastructure Partners L.P. (NYSE:BIP) units have given back almost 17% of their value over the past five months. Since peaking in late 2017, when it reached an all-time high of $45.72, Brookfield Infrastructure has released two solid earnings reports that met most expectations. Yet dividend-paying investments like Brookfield Infrastructure, as well as many other real estate-heavy investments, have fallen out of favor. 

A major cause of this sentiment shift is rising interest rates. Since Brookfield uses a substantial amount of debt to fund growth, higher interest rates will impact it, but I think the sell-off has been far overdone at this stage. Brookfield is now squarely in "buy" territory -- and not just because the price has fallen. There are two other key reasons Brookfield deserves a spot on investors' short lists right now: excellent balance sheet management and capital allocation by its executives, and a major trend that has the potential to drive decades of growth. 

(Note: As a master limited partnership -- or MLP -- Brookfield Infrastructure is best-suited to be held in a taxable account, not a retirement account.)

A view of a city skyline from the water, with a digital network overlaid on top.

Connected cities are one of many big growth opportunities for Brookfield Infrastructure. Image source: Getty Images.

Let's talk debt first

Brookfield Infrastructure's debt load has grown substantially since it gained its footing in 2011 following the global financial crisis, and now rests at $10.8 billion. However, management has done an exceptional job of keeping debt costs relatively low. Over the past five years, its debt has almost doubled, but total interest expense is up only 28%:

BIP Total Long Term Debt (Quarterly) Chart

BIP Total Long Term Debt (Quarterly) data by YCharts.

With an investment-grade credit rating, Brookfield has regularly been able to access capital at favorable rates. This is tied to two things: a business model that generates very predictable and steady cash flows from assets that tend to retain substantial value (and often appreciate), and a management team that has proven very capable at capturing solid returns with capital investments. 

Even as interest rates increase, Brookfield should continue to have access to debt at reasonable cost, while its management team should be able to continue capturing reasonable rates of return on those investments. The latter is especially true considering a major global trend underway that will drive increased need for infrastructure expansion in the years ahead. 

This global trend is Brookfield's friend

Brookfield Infrastructure operates infrastructure assets in five sectors: utilities, energy, transportation, communications, and water. And all of these areas are going to see significant increases in demand in the decades ahead, as the global urban population becomes more and more concentrated. Since 1960, urban inhabitants have increased from about one-third of the world's total population to more than half today:

And this trend is set to continue. According to the United Nations, two-thirds of the planet's population is expected to live in cities by 2050, while the total urban population is expected to increase by more than 2 billion people over the next quarter-century. 

It's going to take a substantial increase in capacity of all five sectors Brookfield operates in to meet the needs of a burgeoning global urban population. The shift would require trillions of dollars of investment. Add in the need for modernization around the world, and the pie that Brookfield is targeting will be sizable for many years. The company is projecting $3-plus trillion in municipal infrastructure spending by mid-2020, a need for $6.7 trillion in water supply/sanitation investment by 2050, and a whopping $26 trillion to be invested in Asian infrastructure by 2030. 

The sheer magnitude of necessary investments in the years ahead should allow management to remain very selective with the assets it chooses to acquire, which should lead to continued excellent rates of return. 

Zig when the market zags

We all like to think we can outsmart the market, though few of us get it right as often as we'd like. However, I think now is an excellent opportunity to do just that with Brookfield Infrastructure Partners. Trading for about 11.7 times trailing-12-month funds from operations (FFO), Brookfield is a very solid value today, while also paying a substantial 4.9% yield. Furthermore, the yield is incredibly secure. Only about half of FFO is required to pay the dividend, and 90% of FFO is from contracts structured at investment-grade metrics. 

This is a testament to how well executives have allocated capital to new acquisitions and organic expansions, but also owes to a keen focus on managing the balance sheet for the long term. 

Combine the solid value and excellent management team with a powerful long-term trend that should create ample opportunities, and Brookfield Infrastructure Partners is more than just a good buy today. It's the kind of holding that long-term investors can make into a cornerstone of their portfolios. 

Jason Hall owns shares of Brookfield Infrastructure Partners. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.