Better Dividend Buy: Brookfield Infrastructure Partners or Brookfield Asset Management Stock?

Brookfield has long been known for great stock options, but which of these two is the better dividend buy?

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It seems as though just when you think we have every type of asset under the Brookfield name, another one comes along. Yet when it comes to dividends, investors want long-term options. Ones that will continue to pay out far beyond these days, when we’re seeking high passive income.

And Brookfield does indeed have many solid options here, including Brookfield Asset Management (TSX:BAM) and Brookfield Infrastructure Partners LP (TSX:BIP.UN).

So, which is better for a dividend buyer?

The case for infrastructure

Not only is infrastructure a strong choice, it’s a growing option. Infrastructure makes up practically every essential item we use on a daily basis. Whether it’s turning on our water, driving our car, or charging our computers, infrastructure is used in some way.

In the case of Brookfield Infrastructure stock, the company continues to have a diverse range of these assets under its umbrella. And like its different infrastructure offerings, the company is growing as well. Brookfield Infrastructure stock actually just received a boost from the acquisition of Triton International, a transport platform that will likely “boost near-term growth,” in the words of one analyst.

Now the deal is about pricing, as the company will need to invest $1 billion in equity into the deal. However, analysts maintained a “strong buy” recommendation for the stock. Further, they increased the share price for the near term.

This also supports dividend growth, as Brookfield continues to seek out long-term options along a broad spectrum of infrastructure options. So right now may be a great time to pick up its 4.36% dividend yield, as of writing.

The case for assets

Now assets aren’t doing so well during this time, as pretty much any company related to financing tends to go down during economic downturns and recessions. However, again we see BAM stock for the stellar diversified portfolio it is.

In fact, it’s not only a dealer located in multiple countries, but also has exposure to multiple types of assets as well. This includes renewable power, private equity, real estate, credit and, yes, infrastructure.

In fact, BAM stock recently proved its worth recently by showing investors it managed to raise US$19 billion in funding so far in 2023 alone. This came from looking outside North America, specifically to the Middle East and Asia.

The company continues to see positive fund flows, as well as stable fee rates. So while other asset managers continue to falter, BAM stock seems to be the diamond in the rough. That being said, the stock certainly doesn’t offer much value at this point, as it continues to trade at a premium, with analysts believing it could now be overweight. Still, it offers a 3.88% dividend yield as of writing for investors to consider.

Bottom line

If you’re an investor looking for stable dividends and not wanting to worry about the whims of fundraising, I would go with BIP stock for now. Infrastructure is steady, stable, and growing. There are many opportunities, many of which have been picked up by BIP stock. And with a 4.36% dividend yield to consider, it’s a great time to do just that.

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

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