Public policy support for infrastructure investment to remain strong globally, especially for the replacement of aged infrastructure assets and buildout of renewables.
Utilities are in the midst of a multi-decade structural growth story. But higher capex needs to be managed in the context of affordability, reliability and sustainability.
Earnings likely to be more resilient than global equities, albeit growth tempered by higher debt costs and increased regulatory and political risks.
We expect the asset class to deliver mid-single digit EBITDA, EPS and DPS1 growth over the next two years despite a potentially challenging economic backdrop.
Global listed infrastructure (−5%) outperformed global equities (−18%) and global bonds (−16%) in 2022. The asset class delivered strong earnings and dividend growth despite significant macro uncertainty and an increased likelihood of a global recession. This was driven by a large pipeline of capital expenditure opportunities across the asset class, strong public policy support for increased infrastructure investment globally and inflation plus pricing which led to higher operating margins in a number of sectors.
1. Earnings Before Interest Taxes Depreciation and Amortization, Earnings Per Share, Dividends Per Share
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