Add Infrastructure To Your High-Yield Portfolio

The Base Case For Infrastructure Investing The base case for infrastructure investing is simple. The businesses operate in a unique playing field that guarantees ample cash flow, steady revenue, minimal competition, and reliable earnings.
Barriers to entry, monopoly. Business is long-lived, initial project builds can take many years to complete and then operations can last for decades (indefinitely). Revenue is stable. Businesses engaged in the construction/buildout phases benefit from government contracts. Businesses engaged in operations benefit from regulated pricing. Inflation-adjusted earnings, revenue, and pricing are often pegged to the dollar or adjusted to match inflation. What this means for investors is steady revenue in the form of dividends. The problem is that most of these stocks aren't what you would consider a growth stock. With the field of players as limited as it is, there just isn't that much room for the businesses to grow. Or is there?
There Is A Growth Opportunity In Infrastructure Investment
There is a growth opportunity in global infrastructure. With spending needs expected to top $69 trillion by 2035 and $94 trillion by 2040, there is a serious gap between current spending and what's needed. At current rates, the world is spending about 3.0% of GDP on infrastructure, think-tanks around the world agree that figure should be closer to 3.5%, $3.7 trillion per year, and governments are beginning to respond.
Most notably, a long-awaited... Read more