Many companies pay a dividend, giving passive income seekers a multitude of options. However, certain sectors are better suited for income generation. One of those is infrastructure.

Companies that operate infrastructure assets tend to generate lots of stable cash flow secured by government-regulated rates and long-term contracts. That gives them a solid foundation for making dividend payments. Brookfield Infrastructure (BIPC 0.32%) (BIP -0.47%) is one of the best infrastructure stocks for passive income. Here's why it stands out as a must-own stock for passive income seekers.

Built for producing income

Brookfield Infrastructure currently offers investors a 3.4% dividend yield. This rate implies that every $1,000 invested will generate $34 of annual passive income. That's about double the income an investor can make compared to an S&P 500 index fund.

The company's higher-yielding payout is on an exceptionally firm foundation. Brookfield operates a diversified portfolio of infrastructure assets across the utilities, energy midstream, transportation, and data sectors. Long-term contracts and government-regulated rate structures support about 90% of its revenue.

Meanwhile, 65% of its income has no volume risk, meaning it gets paid regardless of market conditions. That provides the company with a very stable foundation of recurring cash flow to support its dividend.

Brookfield targets to pay out 60% to 70% of its cash flow via dividends, giving it a nice cushion. That also enables it to retain the other 30% to 40% for funding maintenance and expansion projects. The company also has a strong investment-grade balance sheet, providing additional financial flexibility for funding growth. Brookfield routinely recycles capital -- selling mature assets to fund new investments -- to maintain its strong financial profile while enhancing its growth prospects.

Ample growth drivers

While Brookfield's above-average dividend yield makes it a great stock for income-focused investors, its growth profile takes things up another notch. The company has several catalysts that will help grow its cash flow in the coming years, including:

  • Inflation-driven rate increases: Seventy percent of Brookfield's cash flow benefits from contractual or regulated adjustments for inflation. Because of that, its cash flow rises with inflation.
  • Volume upside from economic growth: About 35% of Brookfield's business will benefit from higher volumes as the global economy expands.
  • Higher commodity prices: Higher oil and gas prices should positively impact the 20% of its market-sensitive revenues in its midstream segment.
  • Expansion projects: The company has a $4.5 billion backlog of expansion projects across its operations that will supply incremental income when they come online.

These organic growth drivers should enable Brookfield to expand the cash flow of its existing infrastructure operations by 6% to 9% per share each year. This forecast supports its plan to grow the dividend by 5% to 9% annually in the coming years. That would continue the infrastructure company's dividend growth streak, which reached 13 straight years in 2022. 

In addition, Brookfield anticipates that acquisitions will enhance its ability to grow its cash flow per share. The company expects to invest $1.5 billion on new investments annually, funded in part through its capital recycling program.

Brookfield has an excellent track record of securing and completing highly accretive acquisitions. It has already agreed to acquire a regulated utility, smart metering business, and fiber services provider in Australia and a European tower company this year. These deals set the stage for further growth in the future. 

Ideal for income production

Many companies pay dividends. Brookfield Infrastructure takes things up several notches by paying a well-supported, high-yielding dividend that it expects to continue growing at a healthy rate for years to come. Those features make it a must-own stock for passive income seekers.