The Motley Fool

A Top Canadian Stock to Start Your Global RRSP Portfolio

Investors are often advised to spread out their exposure across different geographic locations as well as industries.

Large investment funds have the access and scale to put money to work around the world, but this is not as easy for retail investors. Buying stocks of companies in international markets can be difficult, expensive, and risky. Higher fees, political uncertainty, and currency risks are just a few of the obstacles the average Canadian would face when trying to invest directly in international opportunities.

Fortunately, there are a number of Canadian companies with extensive international operations that can serve as adequate vehicles to build global exposure into your retirement fund while minimizing costs and risks.

Let’s take a look at one specific stock that might be an interesting pick right now for a diversified RRSP portfolio.

Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM)

Brookfield Asset Management is an alternative asset manager with holdings around the world that include real estate, renewable power, private equity, and infrastructure. In total, the firm has US$350 billion in assets in a diversified portfolio the company has amassed over the past 120 years.

Net income soared 65% in 2018 to a record US$7.5 billion, and the company reported a 16% increase in funds from operations compared to 2017. The leadership team has been busy in the past 12 months, investing or committing US$35 billion in new transactions. Brookfield Asset Management has strict criteria for putting its cash to work but is still finding attractive assets around the world. The real estate business completed the acquisition of a US$15 billion retail mall portfolio and added a US$11 billion portfolio of office and residential properties. In Europe, the company purchased solar and wind assets in Spain. Other acquisitions included a battery manufacturing firm, natural gas transportation assets, and a leading residential energy infrastructure provider.

Despite the active 2018, Brookfield started 2019 with warchest of US$34 billion in capital available to invest.

Free cash flow exceeded US$2 billion last year and that is expected to increase in 2019. As a result of the strong performance and positive outlook, the board raised the quarterly dividend by US$0.01 to US$0.16 per share, representing a 7% increase over the previous payout.

Management isn’t afraid to lock in value and will sell assets when attractive offers arise. Disposition gains added US$1.5 billion to funds from operations last year, providing additional cash for deployment in new opportunities.

The bottom line

Brookfield Asset Management has the scale and expertise to acquire attractive global assets that would otherwise be out of reach for most companies. This provides Canadian retail investors with access to a diversified high-quality international portfolio through a single stock.

Just Released! 5 Stocks Under $49 (FREE REPORT)

Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $49 a share.
Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune.
Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.

Claim your FREE 5-stock report now!

The Motley Fool owns shares of Brookfield Asset Management and BROOKFIELD ASSET MANAGEMENT INC. CL.A LV. Fool contributor Andrew Walker has no position in any stock mentioned.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.