Follow Dividend Sensei and get email alerts Your feedback matters to us! In fact the forward yield is now at the highest level in 16 months. Or to put another way rather than pay the IRS, investors end up paying the Canadian government on the nonqualified portion of their payouts.
The last few decades have seen most Latin American governments avoid going down this dangerous long-term road. In other words, each asset is itself an LP that then pays distributions to Brookfield Infrastructure, who passes them onto investors.
Normally I prefer to pound the table about very undervalued quality high-yield stocks.
Which is why I have no qualms about recommending this Grade A, world class utility to investors at this time, as long as you are comfortable with its rather unique risk and tax profile.
In addition there is minor exposure to the: Fundamentals are strong and rising That makes it suitable for even the most conservative portfolios, such as those of retirees looking to live off dividends.
I am not receiving compensation for it other than from Seeking Alpha. However should economic troubles return then populist politicians may make foreign investors into scapegoats. That indicates that the stock is likely fairly valued.
Note that I personally do not invest in ultra high risk dividend stocks. I have no business relationship with any company whose stock is mentioned in this article.
Those Buffett like returns were created by a combination of positive factors, small size, record low interest rates, and excellent financial crash induced valuationsthat are not likely to be repeated. Dividend Risk Ratings Low risk: Management does actively hedge against this, but mostly in the form of OECD currency hedges pertaining to the: For example, India is notorious for its bureaucratic red tape, which could make closing deals in that country difficult.
Want to share your opinion on this article? After all, nothing in investing is certain. This means that Brookfield Infrastructure does issue a K1 form, which some investors wish to avoid since it adds some tax complexity.
Risks To Consider No matter how great a stock is, there are always some risks to keep in mind. As for risks to the LP itself there are several to keep in mind as well. For one thing, the international scope of its business means that Brookfield Infrastructure has a significant amount of foreign currency risk.
This might lead to renegotiations of existing contracts and or potential price controls that fail to account for high inflation. Because Brookfield reports and pays distributions in US dollars, should the dollar appreciate significantly against these emerging market currencies, then its cash flows from these assets could fall.
Canadian dollar, British Pound, and Australian dollar. The ROC portion of the distribution reduces your cost basis potentially to zeroand so is a kind of tax deferred distribution that you will pay capital gains taxes on later.
This means that the unqualified dividend taxes, for most people if held in a taxable accountwill largely be offset.
More importantly, since my main focus is income, my favorite time to buy a stock is when the yield is trading at least as high but preferably higher than the five year average yield.
Fundamentals are stable, or if in turnaround management plan seems likely to work, risk of safety downgrade low Positive outlook: And Latin America is a continent that has a rich history of political upheavals with changes in government sometimes leading to nationalization of foreign owned infrastructure assets.
For a low risk, high-yield utility with decades of potentially superb growth ahead of it, that makes for one of the most appealing income investment opportunities in the market today.The International Energy Agency has explored the plug-in electric car market a little deeper, as of the end ofon the occasion of when the first 2 million sales worldwide was reached.
Nadeem Walayat is the Editor of The Market Oracle; with over 25 years experience of trading derivates and portfilio management. contributing to food security and nutrition for all the state of world fisheries and aquaculture Source: imgflip My high-yield retirement portfolio has a simple goal.
Become a highly diversified source of maximum safe yield while also generating market beating long-term income growth (7% a.Download