You probably don't think about how natural gas gets to your house or who owns the bridges and roads you drive over; you just assume that they will be there. And while you probably don't own a gas pipeline, a bridge, or a road, you can own a piece of them with investments in companies like Brookfield Infrastructure Corporation (BIPC 0.06%), Enbridge (ENB 0.96%), and Enterprise Products Partners (EPD 0.05%). And the best part? They all pay reliable dividends supported by the cash flows from the vital assets they own. They all trade for well under $100 per share, so a $5,000 investment could get you a lot of shares.
1. The obvious
When it comes to infrastructure, it would be difficult to find a better all-in-one investment than Brookfield Infrastructure Corporation, which is selling for about $40 per share. Its portfolio of assets spans across North America (44% of funds from operations), Asia/Pacific (20%), South America (19%), and Europe (17%). That global diversification is just the start, because it further includes utilities, transportation (toll roads and bridges), energy infrastructure (pipelines), and data (data centers and cell towers). If you want a simple way to have broad exposure to infrastructure, this is probably the best game in town.
There is one drawback, though: Investors are fairly well aware of the benefits on offer here. That includes the benefit of having Brookfield Asset Management, a company with over 100 years of history overseeing global infrastructure assets, running Brookfield Infrastructure. As such, its shares are generally afforded a premium to the other options on this list, offering a comparably modest dividend yield of 3.5%. However, dividend growth has been a fairly robust 10% annualized since 2019. That makes Brookfield Infrastructure Corporation a particularly worthwhile option for growth and income investors. Investors may also want to consider Brookfield Infrastructure Partners (BIP 1.53%), which is essentially a share class of Brookfield Infrastructure that is structured as a master limited partnership (MLP).
2. Changing with the world
Next up is Enbridge, a Canadian energy giant with a market cap of $80 billion and a generous 6.6% dividend yield. It is also trading for about $40 per share. The core of the company's business is the roughly 84% of earnings before interest, taxes, depreciation, and amortization (EBITDA) that comes from Enbridge's oil and natural gas pipelines, vital infrastructure in North America that couldn't easily be replaced. These are largely fee-generating assets that will be in use as long as these carbon fuels are needed, which is likely to be a very long time.
However, Enbridge isn't ignoring the changes taking shape in the world as society moves toward cleaner energy sources. The rest of its EBITDA comes from a natural gas utility business and a renewable power operation. The gas utility business (12% of EBITDA) is well positioned as natural gas gets used to heat homes instead of dirtier heating oil.
But the real star of the show is the renewable power operation, which is just 4% of EBITDA. Over the next few years, this division is set to see material growth as a series of large offshore wind farms come online. More importantly, it positions Enbridge to change along with the world as clean energy becomes more and more important. This type of forward thinking is what's allowed the company to increase its dividend annually for an incredible 28 years and counting.
3. Focused on energy
For those willing to take on some concentration risk, MLP Enterprise Products Partners -- trading for about $24 a share -- is tightly focused on the energy sector. It offers a distribution yield of 7.9%, the highest yield on this list. And, like Enbridge, it has a long history of annual hikes under its belt, at 24 years and counting. Notably, because it is largely a toll taker, like the other companies on the list, it avoids the inherent volatility of oil and natural gas prices. It's actually a pretty boring investment, which will help conservative income investors sleep well at night.
Adding to the allure on the reliability front, Enterprise covered its distribution with distributable cash flow a solid 1.8 times over in the third quarter. It also has an investment-grade-rated balance sheet and material insider ownership, which helps to keep the goals of investors and management aligned. As far as it goes, it's boring and fairly low risk. The distribution should only be expected to grow in the low-single digits over time, but add that to the large starting yield and most income investors should end up fairly pleased with the end result.
Benefiting from the physical world
Infrastructure is a pretty broad category, and you could get creative with how you invest in these vital cash-generating assets. However, for those that like to keep things simple, Brookfield Infrastructure is a really good option. Investors seeking out higher yields, meanwhile, should take a look at Enbridge and Enterprise. The one you choose will probably depend more on how much you want to focus on the energy sector, but both are attractive high yielders. If you have $5,000 that you are ready to invest, i.e., you don't need it in the short term, all your high-interest debt is paid off, and your emergency fund is solid, these three companies look like good investments.
