AI Might Skyrocket This Stock’s Dividend Beyond 6%

Companies are still in the early stages of learning to deploy artificial intelligence (AI). However, early adopters of the technology are already starting to see positive results, leveraging it to tap into new revenue streams and increase their productivity and earnings.

Brookfield Infrastructure (BIP) (BIPC) is among the many companies already seeing returns on its AI investments. The global infrastructure operator detailed them at its recent investor day. Here's a look at the two biggest impacts it's already seeing from its early AI deployments.

Dual AI growth drivers

Anita Dusevic Oliva, an operating partner at Brookfield Infrastructure Group, discussed the impacts AI is having on the company at its recent investor day. 

“We believe that AI will significantly enhance and accelerate our approach to creating value for our shareholders,” said Dusevic Oliva. She then discussed the two areas in which the company sees AI having an impact on its business: revenue generation and margin enhancement. 


Brookfield believes AI will enable it to generate more revenue from its existing businesses while enhancing its margins. Generating more high-margin revenue will make it even more profitable in the future.

Dusevic Oliva then drilled down into some specifics on how Brookfield sees AI driving more revenue and enhancing its margins. 

From a revenue generation perspective using AI, we are able to process and analyze large data sets to identify growth and cross-selling opportunities across the Brookfield ecosystem. We also see real-time and proprietary data enabling advanced analytics, which will help us predict the right areas of focus as well as enhance customer retention, particularly in our B2C [business-to-consumer] businesses. From a margin enhancement perspective, we are looking at how teams work, and leveraging AI to transform how they'll work in the future. This includes automating a number of back-office processes to decentralize and eliminate shared services.

She then provided an example of AI in action. Brookfield has fully automated the North American call center for its residential decarbonization platform, HomeServe. This has reduced the average call time by 15% to 20% while increasing sales, upgrades, and retention rates by 25%. That's only the beginning. Brookfield “believes that AI through advanced analytics can match customers to products most beneficial to them and accelerate our growth ambitions,” said Dusevic Oliva. 

That's just one example at one of its businesses. Over the long term, Brookfield believes AI will provide a meaningful tailwind to enhance its investment returns. 

An AI-powered business

Brookfield believes AI will drive revenue growth and margin expansion across all its businesses. However, AI is a notable catalyst for the company's data center platform. It has built a global data center business by making several acquisitions and investments over the last few years. It recently agreed to acquire Data4 and Compass Datacenters to further expand its platform.

Generative AI is one of four tailwinds driving the continued expansion of Brookfield's data center platform. That's because they are crucial to supporting that technology. Udhay Mathialagan, who leads Brookfield Infrastructure's global data center platform, commented on the importance of data centers in supporting AI at the company's recent investor day. 

“The one plain truth is the only way AI can be delivered is through physical data infrastructure on the ground,” said Mathialagan. “And what that means is data centers and lots of them.”

That's helping drive transformational growth for the company's data center platform.


As the slide shows, the company has a clear path to grow its data center capacity by more than 250% over the next few years. That will increase the funds from operations (FFO) from its platform by an eye-popping 350%. Meanwhile, the company believes it can increase its capacity five-fold over the longer term to 2.5 gigawatts without any additional acquisitions. While AI isn't the only factor driving that robust growth, it's playing an increasingly important role in powering the accelerating expansion of Brookfield's global data center platform.

AI could accelerate Brookfield's dividend growth

Brookfield Infrastructure believes AI will allow all its businesses to generate more revenue and enhance their margins. On top of that, it will be a major growth catalyst for its data center platform. These factors should enable Brookfield to grow its FFO faster.

That bodes well for its dividend. Brookfield has increased its payout annually for 14 straight years, including by 6% earlier in 2023. The company is targeting annual payout growth in the 5% to 9% range in the future. AI could help it deliver increases toward the top end of that range as it drives accelerated FFO growth. That combination of accelerated earnings growth and the potential for high dividend growth could enable Brookfield to produce strong total returns in the future. 

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