Brookfield Infrastructure Partners (BIP -1.57%) was on fire in 2019. Units of the global infrastructure partnership soared 44.8% for the year, according to data provided by S&P Global Market Intelligence. Add in the company's high-yielding dividend, and the total return was an even more impressive 51.4%. That significantly outpaced the equally red-hot S&P 500, which produced a 31.5% total return in 2019.
Here's a look back at what drove the company's performance last year.
Brookfield Infrastructure Partners spent much of last year repositioning its portfolio of global infrastructure business to drive faster future growth. The highlights included closing investments in:
- A South American data center joint venture
- A natural gas pipeline in India
- A data distribution business in New Zealand
- The second phase of a large-scale midstream acquisition in western Canada
The company also sold several businesses last year, including bulk port operations in Europe, a regulated distribution operation in Chile, a district energy and distribution business in Australia, and another stake in a Chilean toll-road business. Those sales gave it the funds to close its acquisitions and to make additional investments.
On top of that, Brookfield delivered organic growth across its legacy businesses at the high end of its 6% to 9% annual target range. Thanks to those dual growth drivers, the company exited the year with an annualized earnings run rate that was 17% above its level in June 2018.
Brookfield already has several more transactions in the pipeline that will enable it to grow at an accelerated rate in 2020. These include an investment in a major North American railroad operator and two data infrastructure transactions. With that acquisition-driven growth, and the expectation that the organic growth rate of its legacy portfolio will be at the high end of its annual target range, Brookfield should generate double-digit earnings growth again in 2020.
Last year was a bounce-back period for Brookfield Infrastructure, as it made back 2018's 23% decline (and then some) due to the success of its strategic plan. Meanwhile, more high-speed growth is ahead in 2020, as the company works to close the acquisitions it secured last year. Because of that, the company has the fuel to potentially generate market-beating total returns again this year.