Brookfield Infrastructure Corp (BIPC): A Deep Dive into Its Performance Potential
Long-established in the Utilities - Regulated industry, Brookfield Infrastructure Corp (NYSE:BIPC) has enjoyed a stellar reputation. However, it has recently witnessed a daily loss of 4.87%, juxtaposed with a three-month change of -27.12%. Fresh insights from the GF Score hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of Brookfield Infrastructure Corp.
Understanding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
Financial strength rank: 3/10
Profitability rank: 6/10
Growth rank: 4/10
GF Value rank: 6/10
Momentum rank: 5/10
Based on the above method, GuruFocus assigned Brookfield Infrastructure Corp the GF Score of 69 out of 100, which signals poor future outperformance potential.
Brookfield Infrastructure Corp: A Snapshot
Brookfield Infrastructure Corp is an indirect subsidiary of the partnership of the diversified infrastructure owner and operators. Its business is comprised of a U.K. regulated distribution operation, a Brazilian regulated natural gas transmission operation and an Australian regulated utility. With a market cap of $4.23 billion and sales of $1.98 billion, the company has an operating margin of 67.78%.
Financial Strength Analysis
Brookfield Infrastructure Corp's financial strength indicators present some concerning insights about the company's balance sheet health. The company has an interest coverage ratio of 2.19, which positions it worse than 75.76% of 429 companies in the Utilities - Regulated industry. This ratio highlights potential challenges the company might face when handling its interest expenses on outstanding debt. The company's Altman Z-Scoreis just 0.56, which is below the distress zone of 1.81. This suggests that the company may face financial distress over the next few years. Additionally, the company's low cash-to-debt ratio at 0.07 indicates a struggle in handling existing debt levels.
Growth Prospects
A lack of significant growth is another area where Brookfield Infrastructure Corp seems to falter, as evidenced by the company's low Growth rank. The company's revenue has declined by -8.8 per year over the past three years, which underperforms worse than 93.76% of 481 companies in the Utilities - Regulated industry. Stagnating revenues may pose concerns in a fast-evolving market.
Conclusion
Given Brookfield Infrastructure Corp's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential underperformance. While the company has a strong history, its current financial health and growth prospects may limit its ability to outperform in the future. GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
