Macquarie Infrastructure Company (MIC)

Macquiarie Infrastructure Company (MIC) is another example of a company i really like in this phase of the investment cycle. Macquaire Infrastructure Company owns and operates infrastructure businesses that are hard to replicate, provide basic services, and hold competitive positions due to high barriers to entry.

MIC pays a healthy dividend 4,28 annualized. That gives the company a dividend yield above 5 %. What is more interesting, this company have raised their dividend every quarter for years in a row now. The yearly growth in dividend per share has been above 20 % since Q2 2012. In other words, this company have been growing dividend +20 % in 3 years while paying a healthy 5 % dividend.

But of cause the most important part for investors is to know and figure, what the future looks like regards dividend growth.

The company is projected to have earn 6 $ per share in free cash flow so the 4,28 $ in dividends is covered by earnings.

MIC is themselves guiding for a +14 % dividend growth rate the coming years. On top of the 5 % current dividend rate it makes and attractive stock in a conservative driven market segment with high barrier to entry in US infrastructure segments.

 

MIC has 4 business segments. The biggest one is IMTT eller “International Matex-Tank Terminals”. IMTT operates terminals for Liquid handling and liquid storages.

The next biggest company is Atlantic Aviation. This company handles flight service as baggage handling, fuel handling etc. in airports, especially smaller airports. It is again a sticky business with healthy cash flows that are growing with the numbers of flight passengers in the US. A number that is constantly increasing.

The 2 smallest businesses are Hawaii Gas and CP&E. Hawaii Gas services Hawaii with gas and LNG services on contracted basis. CP&E is contracted energy especially renewable energy assets (this segment is also used as a tax shield for the other businesses)

 

MIC is managed by a management company that is paid on business performance. MIC is a holding company for infrastructure assets so the management company will dispose or acquire assets to keep the dividend growth high and make operational improvements in the companies they buy.