Investing in fundamentally strong dividend stocks can provide investors with stable passive income and substantial long-term capital growth. One of the high-quality dividend stocks on the Toronto Stock Exchange (TSX), Brookfield Infrastructure Partners (ticker: BIP.UN), currently offers a potential long-term opportunity as its share price has retreated 32% from its historical high.
BIP is a large-cap company with a market valuation of nearly $20 billion, operating critical infrastructure assets worldwide across four sectors: utilities, transportation, midstream energy, and data centers.
Despite challenges in the macro environment, the company delivered solid financial performance in the second quarter of 2025. Funds from operations (FFO) for the quarter reached $638 million, a 5% year-over-year increase, or 9% growth when excluding currency impacts. This growth was driven by organic expansion of existing assets and contributions from newly acquired projects. At the same time, the company actively pursued a capital recycling strategy, generating $2.4 billion in proceeds through partial strategic asset divestments, such as the sale of a stake in an Australian coal export terminal and the monetization of several data center and logistics assets. These moves not only unlocked value but also provided capital for new investments.
During the reporting period, BIP completed three significant acquisitions totaling $1.3 billion, the most notable being the $9 billion acquisition of Colonial Pipeline. This pipeline system spans 5,500 miles with a daily transmission capacity of 2.5 million barrels, offering a mid-single-digit cash yield and stable fundamentals. Additionally, BIP invested in a fiber optic network platform and a railcar leasing portfolio, further diversifying its asset structure.
Trading at a forward P/E ratio of 12x, BIP’s valuation remains reasonable. If the P/E multiple expands to 15x, the share price could reach $39 by 2027, representing approximately 30% upside from current levels. Combined with dividend reinvestment, the total return could approach 40%. With its robust portfolio of assets, clear growth strategy, and active capital management, BIP continues to be a high-quality dividend stock worth watching closely on the TSX.
