The 1 Dividend Stock I’d Buy Before the Next Rate Call

Rates might not move at the next Bank of Canada meeting, but markets will still act like the world will end either way. The BoC held the policy rate at 2.25% on Jan. 28, 2026, and it set the next decision date for Mar. 18, 2026. If you want a dividend stock before that call, keep your checklist simple. Prioritize steady cash flow, sensible leverage, and a payout that leaves room for reinvestment. A high yield means nothing if refinancing risk sits underneath it, or if management needs to “pause” the payout the moment funding costs jump. So let’s look at one dividend stock to consider.

BIP

Brookfield Infrastructure Partners (TSX:BIP.UN) checks many of those boxes as it owns essential assets that people use every day. It invests across utilities, transport, midstream, and data infrastructure, and it targets long-term, contracted, and regulated cash flows where possible. That mix means the story does not hinge on one sector’s mood. When consumers pull back, people still turn on lights, move goods, and store data.

Over the last year, management leaned into its self-funding playbook. It said it exceeded a US$3 billion capital recycling target in 2025 and funded five new investments. That matters in a rate-sensitive market because asset sales can fund new deals without forcing an equity raise at an inconvenient price. It also lets BIP shift away from slower assets and into higher-return opportunities when it spots them, instead of waiting for “perfect” market conditions.

The partnership also started talking more directly about artificial intelligence (AI)-linked infrastructure, and it did so in a way that fits its DNA. The CEO said funds from operations should “inflect higher” in 2026 as recent investments contribute and as it expands its growth pipeline to include AI infrastructure. That does not mean it wants to build chatbots. It means it wants to own the boring backbone behind them, like data centres and connectivity, where contracts can run for years and demand can rise even when the macro picture looks messy.

Earnings support

Earnings show why income investors keep coming back. For 2025, BIP generated funds from operations (FFO) of US$2.6 billion, or US$3.32 per unit, versus US$3.12 per unit in 2024. Management highlighted strong operating performance, inflation indexation, stronger volumes, and more than US$1.5 billion of capital projects commissioned from its backlog. That blend matters as it gives BIP multiple ways to grow even if the economy slows and investors stay picky.

The segment mix also adds comfort when one corner of the world cools off. In 2025, utilities produced US$786 million of FFO, transport produced US$1.1 billion, midstream produced US$668 million, and data rose to US$502 million from US$333 million a year earlier. Data stands out for Canadians watching AI spending, as it ties real earnings to storage and connectivity demand. The bigger point, though, is diversification. No single cash engine needs to carry the whole load.

Then there is the payout, which stayed on script. BIP declared a quarterly distribution, which marked a 6% increase and its 17th consecutive distribution increase. This adds up to a 4.8% yield at writing. The valuation will not look cheap on a plain P/E screen, trading at 42 times earnings, and infrastructure investors rarely buy it for that reason. This suggests the market prices it as a quality compounder, not a bargain-bin rescue. However, here’s what even $7,000 can bring in from dividends alone.

COMPANYRECENT PRICENUMBER OF SHARESANNUAL DIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTBIP.UN$52.15134$2.47$330.98Quarterly$6,988.10

Bottom line

So could it be a buy for others before the next rate call? It could, if you want a dividend grower that can hold up when rates stay stubborn and headlines stay noisy. The diversification, capital recycling, and rising data contribution support that case. The risks still matter: financing costs can climb, big projects can slip, and asset sales can make year-to-year comparisons choppy. If you can accept those trade-offs and size it responsibly, BIP.UN can look like a calm choice to own while everyone else argues about what March 18 will bring.

The post The 1 Dividend Stock I’d Buy Before the Next Rate Call appeared first on The Motley Fool Canada.

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More reading

• The Utilities Play: Boring, Reliable, and Suddenly Profitable
• Retiring? $1 Million Isn’t Enough Anymore
• A 5% Dividend Stock is My Top Pick for Immediate Income
• Should You Buy This TSX Dividend Stock for its 5% Yield?
• Top Canadian Stocks to Buy Under $50

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.