Everyone in Canada should own shares of at least one of the Brookfield companies. Over the years, these companies have produced exceptional results. Their dividends and distributions are excellent, and the assets they own give Canadian investors international exposure that they otherwise wouldn’t have. It is not a question of whether you should invest in Brookfield; rather, it’s a matter of which stock you should choose to best meet the needs of your personal portfolio.
Brookfield Renewable Energy LP (TSX: BEP.UN)(NYSE: BEP)
This subsidiary is invested in a variety of renewable energy projects worldwide. It owns hydroelectric dams, solar fields, and wind farms in countries located in South America, Asia, and North America. The global growth strategy generated funds from operation (FFO) growth of 14% over the same quarter the year before. BEP pays a distribution of just under 7%, a distribution that recently grew by 5% as of the latest earnings announcement.
Brookfield Property Partners LP (TSX: BPY.UN)(NASDAQ:BPY)
If you want to get involved in the rental business, this is the stock to own. BPY owns a massive portfolio of rental properties servicing student, multi-family, industrial, office, and hospitality customers. The company pays a distribution of just under 5% that grew by 5% as of the latest quarterly results. Company FFO grew by 15% in 2016, which was primarily driven by the company’s investment in core retail operations.
Brookfield Infrastructure Partners LP (TSX: BIP.UN)(NYSE: BIP)
With its focus on securing businesses in the infrastructure space, BIP continues to execute on its mission to grow cash flow and dividends to its investment partners. This segment of the Brookfield family owns a natural gas distribution business in North America, telecommunications infrastructure in Europe, and many other global infrastructure projects. It also yields 3.5% at the current prices — a distribution that grew by 7% earlier in February. This yield was powered by FFO that grew 5% over the previous year’s results.
Brookfield Business Partners LP (BBU.UN)(NYSE: BBU)
Of all the subsidiaries, BBU is the most unique. It is a business services and industrials company that focuses on operating high-quality businesses with high barriers to entry and/or low production costs. Some examples of businesses it has acquired are Johnson Controls’ Power Solutions business, Healthscope, Australia’s second largest hospital provider, and global construction services. The company increased its FFO by 155%, which was primarily due to improvements in its Industrial segment. BBU pays a distribution of 0.69%.
Brookfield Asset Management Inc. (TSX:BAM.A)(NYSE: BAM)
This is the one-stop-shop holding company for owning all of the Brookfield names under one umbrella. Instead of trying to choose which stock you should own, BAM gives you the opportunity to take a little from each of its subsidiaries. The company has operations in over 30 countries and pays a modest dividend of about 1.5% at the current share price and trades at a low valuation of 12 times trailing earnings.
Which should you buy?
Which of these companies you buy is really a matter of preference. Personally, I prefer to own BEP as a way to get big U.S. dollar dividends. But for most people, owning BAM is probably the best way to go. By purchasing the parent company, you can be assured to receive good returns from all the subsidiaries including Brookfield’s private equity funds. The dividend is smaller, but it is growing over time at a pretty healthy pace. If you want to get the exposure that Brookfield has to offer without the headache of choosing an individual subsidiary, BAM is the way to go.
