Is Brookfield Infrastructure Partners L.P. Destined for Greatness?

Investors love stocks that consistently beat the Street without getting ahead of their fundamentals and risking a meltdown. The best stocks offer sustainable market-beating gains, with robust and improving financial metrics that support strong price growth. Does Brookfield Infrastructure Partners (BIP 2.20%) fit the bill? Let's take a look at what its recent results tell us about its potential for future gains.

What we're looking for
The graphs you're about to see tell Brookfield's story, and we'll be grading the quality of that story in several ways:

• Growth: are profits, margins, and free cash flow all increasing?
• Valuation: is share price growing in line with earnings per share?
• Opportunities: is return on equity increasing while debt to equity declines?
• Dividends: are dividends consistently growing in a sustainable way?

What the numbers tell you
Now, let's take a look at Brookfield's key statistics:

BIP Total Return Price data by YCharts

Source: YCharts. * Period begins at end of Q1 2011.

BIP Return on Equity (TTM) data by YCharts

Source: YCharts. * Period begins at end of Q1 2011.

How we got here and where we're going
Brookfield Infrastructure Partners earns half the passes available to it on our assessment today for a final score of four out of eight passing grades. This diversified MLP seems to be putting together the right combination of fundamental growth and dividend growth investors crave -- although its GAAP profitability has tanked, Brookfield's funds from operations (FFO),  an MLP-specific measure of financial success, has grown from $197 million in the 2010 fiscal year to $682 million in 2013, for an improvement of 246% in three years. That's much better than Brookfield's bottom-line metrics, so investors probably have less cause for concern than this assessment may indicate. But can Brookfield continue to make the right moves while simultaneously restoring its bottom line to its former glory? Let's dig deeper to find out.

Brookfield's latest quarterly report  showed a 16% year-over-year improvement in FFO, which kept the company on track to pay out 60% of FFO to shareholders. The company's greatest strength came from its transport segment, which boomed as its Australian railroads expansion program reached completion . It also helped that high grain yields boosted transport volumes, but Brookfield also enjoyed growth in toll road revenue thanks to its greater interest in Brazilian roads. As the fiscal year progresses, Brookfield plans to invest up to $1 billion in building or maintaining various operations, and $600 million has already been deployed to that effect. The company will also complete its buyouts of Macquarie District Energy and Seattle Steam in the second half of 2014, which will complement its existing utility businesses.

Over the past several years, Brookfield has handily outperformed most of its larger and better-known peers in the energy sector, and the growing diversity of its assets offers a variety of ways for investors to benefit from the world's need for new infrastructure. For example, Fool energy specialist Jason Hall highlights Brookfield's 9,000-plus miles of power transmission lines in North America as a way to benefit indirectly from the growth of clean energy projects in North America. Brookfield also has its hands in some old-fashioned dirty energy, as it operates the world's largest coal export terminal.

Brookfield still has a sizable backlog of investments on tap that could organically boost the company's assets by nearly 50%. That's not quite as much growth as investors have been used to, but it's still far better than the growth offered by many utilities with similar dividend yields. One potential source of new growth might just come from the latest American political crisis. Congress' recent dithering over the Highway Trust Fund  could result in a rapid expansion of tolls on American highways. Brookfield has proven more than adept at acquiring and managing toll roads in other countries, so there's no reason not to expect Brookfield to capitalize on a long-term income opportunity to privatize key American roadways, should such an opportunity present itself.

Putting the pieces together
Today, Brookfield Infrastructure Partners has some of the qualities that make up a great stock, but no stock is truly perfect. Digging deeper can help you uncover the answers you need to make a great buy -- or to stay away from a stock that's going nowhere.