Brookfield Infrastructure (BIP 0.07%) (BIPC 0.84%) is having another very solid year. The global infrastructure operator is growing its earnings at a healthy clip, mainly driven by a couple of notable organic growth drivers.

The company's already solid growth rate is about to get a meaningful boost from recently completed acquisitions. That will give the company more fuel to continue growing its dividend, which yields a very attractive 6.7% these days.

Organic drivers powered the quarter

Brookfield Infrastructure generated $560 million of funds from operations (FFO) during the third quarter. That was up 7% compared to last year. The company benefited from the strong underlying performance of its existing infrastructure businesses, most of which can raise rates in line with inflation. It also got a boost from completing $1 billion of capital projects over the past year. 

Three of the company's four business segments delivered healthy growth in the quarter:

A chart showing Brookfield Infrastructure's earnings by segment in the third quarter of 2023 and 2022.

Data source: Brookfield Infrastructure. Chart by author.

FFO from the company's utilities segment jumped 17%. Organic growth was over 10%, driven by inflation-indexed rates and $500 million of capital project completions. The company also benefited from the acquisition of HomeServe in January. These positives helped offset the sale of its interest in a regulated utility in Australia.

Brookfield's transportation segment delivered 7% organic growth in the period, driven by much higher rates (8% across its toll roads, and 7% in its rail networks). That helped offset the impact of higher borrowing costs at its U.K. port operations, more normalized commodity prices at its LNG export terminal, and the sale of its Indian toll road portfolio in June.  

FFO from the company's data segment rose 10%. This platform benefited from the acquisitions of a European tower business in February and a European data center portfolio in August. That helped offset the impact of selling its integrated data distribution business in New Zealand in June.

The underlying strength of those segments helped offset the weakness in Brookfield's midstream platform, where FFO declined by 5%. The partial sale of its U.S. gas pipeline and market-sensitive revenues at its Canadian midstream business weighed on results, offsetting the positive impact from higher utilization and the initial contribution of its Heartland Petrochemical Complex.

An acquisition-driven boost is coming

Brookfield Infrastructure routinely recycles capital by selling mature assets and redeploying the proceeds into higher return opportunities. The company closed nearly $2 billion of asset sales in the second quarter of this year, which acted as a headwind in the third quarter.

However, it has quickly put that capital back to work in deals that will boost its bottom line in the fourth quarter. The company noted that these investments are at "some of the best risk-adjusted returns we have seen in the last decade." 

In September, the company closed its $1.2 billion investment to privatize Triton International, a leading global intermodal logistics company. That acquisition will provide a notable boost to its FFO because it generates strong cash flow. It will also provide additional growth opportunities as Brookfield leverages this business to better service its port and rail customers. 

Brookfield also secured several deals to significantly enhance its global data center platform. It closed its acquisition of European data center platform Data4 in August. It also invested in North American data center developer Compass Datacenters, which closed in October.

In addition, Brookfield recently agreed to acquire a portfolio of data centers out of bankruptcy from Cyxtera and the associated real estate from third-party landlords. It's investing a net $1.3 billion into the transactions, which should close in the first quarter of 2024. Brookfield plans to integrate the data centers into its existing Evoque business to create a leading data center operator in North America. The transformative transaction will significantly enhance its data center platform's earnings. 

Combined with its strong organic growth drivers, these deals put Brookfield on track to deliver double-digit FFO-per-share growth over the next few years. That supports the company's plan to grow its dividend at a 5% to 9% annual rate over the long term. Brookfield has increased its payout every year since its formation 14 years ago, growing it at an 8% compound annual rate over the last decade.

Smart moves are paying dividends

Brookfield has capitalized on several high-return acquisition opportunities that will start boosting its bottom line in the fourth quarter. Along with its strong organic growth drivers, these new additions position the company to grow rapidly over the next few years. The company's brilliant acquisition strategy will give it more fuel to continue growing its dividend. That makes it an even more attractive stock to buy for income and upside right now.