UTF - 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.