The stock market, ever prone to hasty judgments, continues its ascent with the S&P 500 (^GSPC) boasting a 15% rally over twelve months. This enthusiasm has inflated its P/E ratio from 24.2 to 25.3 and diminished its dividend yield from 1.3% to 1.2%. One might say the market has grown rather too fond of its own charms, leaving prudent investors to seek quieter corners of the ballroom where fortunes are made with less fanfare.
Yet there exist certain stocks whose valuations remain remarkably unassuming, offering yields exceeding 4% despite their steady comportment. Brookfield Infrastructure (BIPC) (BIP), Energy Transfer (ET), and W.P. Carey (WPC) stand apart as unpretentious prospects. Their dividends, like well-mannered proposals, arrive with regularity and promise improvement.
High growth and income for a low price
Brookfield Infrastructure, possessed of quiet confidence, anticipates growing its funds from operations (FFO) from $3.12 to at least $3.43 per share this year. At under $40 per share, it trades at less than 12 times FFO-a valuation so modest one might mistake it for diffidence. Its 4.5% dividend yield, however, speaks plainly to its merits.
The company’s aspirations are no less measured. Forecasting organic growth of 6% to 9% annually, Brookfield attributes this to inflation-linked contracts, expanding global commerce, and a robust project backlog. With sixteen consecutive years of dividend increases at a 9% compound rate, its history suggests a steadfast character unlikely to disappoint.
A bottom-of-the-barrel valuation
Energy Transfer, though bearing the awkwardness of a master limited partnership (MLP), anticipates $16.1 billion in adjusted EBITDA this year. Trading at less than 9 times EBITDA, it occupies the second-lowest multiple among midstream peers-a position akin to the wallflower whose dowry proves unexpectedly ample.
Its leverage ratio now rests comfortably within a 4.0x-4.5x range, marking the MLP’s finest financial hour. While growth may slow to mid-single digits this year, projects like the $5.3 billion Desert Southwest pipeline expansion promise renewed vigor by 2029. The 7.7% distribution, targeted for 3% to 5% annual increases, stands as a testament to its latent potential.
Building back better
W.P. Carey, recently divorced from its office holdings, now courts investors with a 5.5% dividend yield. Trading at 13x FFO versus 18x for peers, the REIT embodies the virtue of prudence-having spent £2.5 billion on superior properties while resetting its dividend to align with more conservative means.
Its quarterly dividend increases since early last year (3.4% annualized) reflect a courtship conducted with deliberate care. The rebuilt portfolio, now weighted toward warehouses and industrials, suggests a suitor refined by experience.
Complete packages
Brookfield Infrastructure, Energy Transfer, and W.P. Carey share the uncommon grace of low valuations paired with growing dividends. Their financial strength, like a well-written character reference, assures continued prosperity. In a market obsessed with spectacle, these stocks offer the quiet dignity of substance over style-a truth universally acknowledged, though rarely acted upon.
Thus concludes our market ballroom’s inventory of overlooked suitors. One might do well to observe their dances more closely. 🌸
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2025-08-19 10:30