The portfolio of Brookfield Infrastructure (NYSE:BIP)(NYSE:BIPC) is continuously evolving. The global infrastructure operator routinely recycles capital by selling slower-growing mature businesses and reinvesting the proceeds into higher-returning opportunities. Because of that, the company will likely look quite different five years from now.

Here's a glimpse at where Brookfield might be by 2025.

An airplane parked at an airport with the sun rising ahead.

Brookfield is looking to add airports to its infrastructure mix. Image source: Getty Images.

Betting big on data

Brookfield Infrastructure currently has a very diversified portfolio, both by focus area and geography. It generates 35% of its cash flow from utility-like businesses, 32% from transportation, 25% from energy, and 8% from data infrastructure, with operations that span North and South America, Europe, and the Asia-Pacific region.

While the data segment is currently Brookfield's smallest profit driver, that probably won't be the case in five years. The company has been actively building out this segment in recent years, which will see it become a much larger contributor in the future. For example, it's in the process of investing $400 million into an Indian telecom towers business and another $140 million into a similar business in the U.K. Meanwhile, it recently bought a data distribution business in New Zealand and data centers in the U.S., Brazil, and Australia. It also tried to buy a fiber optic business in the U.S. but lost out to a higher bidder.

These deals have the company on track to grow the earnings of its data transmission and distribution businesses at an 8% compound annual rate over the next five years, while data storage should grow at an even faster 20% compound annual rate. In addition to that embedded organic growth, the company will likely continue to make data-driven acquisitions over the next few years. These moves could make data one of the company's biggest profit drivers by 2025.

Extending the platform

Brookfield has steadily expanded its portfolio over the years to operate different types of infrastructure. It currently has 10 business groups within its four segments. This number will likely increase over the next five years as the company captures opportunities in new areas, much as it has in recent years with the expansion of its data infrastructure business to include storage and distribution.

Two potential new business types that Brookfield seems likely to add over the next five years are water and airports. The company has had its eyes on water infrastructure for several years. It has identified three opportunities that fit within its business model, including:

  • Water supply, which includes the refurbishment of aging infrastructure and desalination.
  • Water transportation, including irrigation. It made one small water irrigation investment a few years ago.
  • Water recycling and gray-water purification.

Brookfield has also been trying to grow its transportation segment by adding airports to the mix. It had a deal in place in 2015 to acquire an airport operator in Brazil, but the transaction fell apart. Meanwhile, it has recently been monitoring the airport sector in India, which it believes could be an attractive investment opportunity if the right deal comes along.  

The company is a very patient investor and will wait years until it finds the best fit to build out a new platform type. At some point, it will likely find deals in the water and airport sectors that make sense, as well as opportunities in other infrastructure segments that diversify its revenue stream and add new sources of growth.

A mix shift could accelerate growth over the next five years

Brookfield expects its existing portfolio of infrastructure businesses to grow its cash flow per share at a 6% to 9% annual rate over the long term, which should support 5% to 9% yearly growth in its dividend. However, the company is always tinkering with its portfolio to create more value for shareholders by selling slower-growing businesses and replacing them with those that can power accelerated growth.

That trend seems likely to continue over the next five years as it focuses on building out its data infrastructure business and adds new growth drivers like water infrastructure and airports to the mix. That view suggests Brookfield could outperform its base plan and potentially grow its cash flow at a double-digit rate over the next five years, which could give it the fuel to outperform the market.