Why I Think Every Investor Should Consider Brookfield Asset Management Inc.

Because Brookfield Asset Management Inc. (TSX:BAM.A)(NYSE:BAM) is so efficient at growing investors’ money, I believe this stock is a no-brainer investment.

| More on:
The Motley Fool

There are plenty of great companies available for investors to invest in. But there are few companies that I can comfortably say that every investor should consider owning. The one company that I genuinely believe is a can’t-miss stock is Brookfield Asset Management Inc. (TSX:BAM.A)(NYSE:BAM).

The business model of Brookfield is rather straight forward. It takes money from limited partners–which are different from common stock investors–and invests it for them in a wide range of assets and geographies. It buys infrastructure, real estate, and energy projects and invests in private equity. All told, the company has its hands in multiple pots. Brookfield makes money by taking a decent cut of the profits that it generates from its limited partners.

But that’s what a lot of hedge funds and private equity funds do. The difference is that Brookfield is one of the best in the business. Its ability to identify assets that are undervalued has made the company incredibly successful. And we’re not talking about small assets here. The company has a war chest of $10 billion that it is looking to deploy, so it is always looking to make a large deal.

For example, it currently has an offer on the table to purchase Asciano, Ltd. for US$6.6 billion. This is an Australian port company–the exact type of asset that Brookfield likes to buy. When economies are strong, ports are great businesses, and that’s what Brookfield is banking on. Right now, it is competing with another consortium of investors looking to buy it, but I wouldn’t be surprised if Brookfield increased its bid to seal the deal.

Another example of its ability to deploy assets is in Brazil. Brazil’s credit rating dropped due to economic concerns. This makes it more expensive for businesses to get loans, putting them on track to go out of business. Brookfield has set aside $1.2 billion to buy up entire infrastructure projects for pennies on the dollar. When the country’s economy gets strong again, those assets will be worth much more, making Brookfield and its investors a lot of money.

Investors should buy Brookfield

In my opinion, buying this stock is a no-brainer. It has consistently rewarded investors with high growth and a dividend. If you had invested $10,000 in the company 20 years ago, that investment would be worth $320,000 today. On average, the company has grown by 19%.

Brookfield also pays a small, but consistent dividend of $0.16/share. This averages out to a yield of 1.38%.

The reality is that this is a company that knows how to take money, deploy it, and turn it into considerable profit. Investors that buy this stock should expect to see continued growth as that $10 billion war chest is used to acquire assets.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Jacob Donnelly has no position in any stocks mentioned. The Motley Fool owns shares of BROOKFIELD ASSET MANAGEMENT INC. CL.A LV.

More on Investing

Business man on stock market financial trade indicator background.
Tech Stocks

1 Growth Stock Down 50 Percent to Buy Right Now

There are plenty of growth stocks in the market worth considering, but Shopify (TSX:SHOP) looks like one of the best…

Read more »

You Should Know This
Dividend Stocks

How to Convert a $300 Monthly Investment Into $338 in Monthly Income

If you want a certain amount in monthly passive income, invest a similar amount today and leave the rest to…

Read more »

Increasing yield
Dividend Stocks

3 Income Stocks With Big Yields to Consider in April 2024

If you haven’t yet made your March investments, here are three income stocks to buy the dip and lock in…

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

RRSP Investors: Don’t Miss Out on This Contribution Hack!

This hack has so many benefits for you -- not just when you put it in your RRSP but for…

Read more »

edit Sale sign, value, discount
Stocks for Beginners

These 3 Growth Stocks Are on Sale and Set to Surge

Some growth stocks are on sale right now that offer massive long-term potential for investors. Here's a trio to consider…

Read more »

Cannabis grows at a commercial farm.
Cannabis Stocks

Why Canopy Growth Stock Could Double in 2024

Canopy Growth (TSX:WEED) stock saw its share more than double in the last two weeks. So, can it do it…

Read more »

Young woman sat at laptop by a window
Dividend Stocks

3 Dividend Stocks Everyone Should Own for the Long Haul

For investors looking for top-tier dividend stocks to buy and hold for the long term, here are three of my…

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

Passive Income: 2 Safe Dividend Stocks to Own for the Next 10 Years

Dividend stocks such as Manulife and Fortis can help you generate a stable and recurring passive-income stream.

Read more »