If you’ve got an extra $400 sitting in your account and you’re wondering where to put it to work, one of the best moves you can make is investing in high-quality Canadian stocks. The smartest picks share key traits such as solid fundamentals, strong growth potential, and reliable dividend payouts. These are the kinds of companies that can navigate economic downturns and are likely to outperform the broader markets in the long term.
With this backdrop, here is one of the smartest Canadian stocks to buy with $400 right now.
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Smartest Canadian stock
Investors looking for the smartest Canadian stock could buy Brookfield Asset Management (TSX:BAM) right now. Shares of this leading alternative asset manager have pulled back, declining about 20% year to date, providing a solid opportunity to buy its stock at a discounted price.
Despite the recent decline, the stock has increased about 56% in two years, delivering a compound annual growth rate (CAGR) of 24.9%. In addition to this capital appreciation, Brookfield has consistently rewarded shareholders by increasing dividend payments.
Brookfield Asset Management focuses on increasing its fee-bearing capital and driving its operating margins, which supports its earnings and dividend payouts. At the end of the fourth quarter (Q4), the firm had $539 billion in fee-bearing capital, with 87% being long-dated or perpetual. This structure stabilizes its earnings, enabling it to navigate market volatility well.
The asset manager also has a well-diversified customer base, serving over 2,300 clients globally. Its private wealth channel is also expanding, further fueling its growth and widening its revenue streams.
Brookfield’s steady revenue growth and focus on controlling operating costs help drive its earnings and dividend payments. Recently, the company announced a 15% increase to its annual dividend, bringing it to $1.75 per share. The stock offers an attractive yield of over 4% at current price levels.
Brookfield Asset Management to deliver stellar returns
Brookfield Asset Management is poised to deliver impressive returns thanks to its focus on raising fee-based capital, investments in rapidly expanding sectors, and strategic acquisitions.
In 2024, it raised substantial capital, significantly boosting its investment capacity. Higher capital and cost control measures will drive its revenue and earnings in the years ahead. Brookfield’s early bets on artificial intelligence (AI) infrastructure and clean energy are beginning to pay off as these industries experience rapid expansion. Meanwhile, its growing footprint in the private credit space presents lucrative new opportunities, further enhancing its long-term growth potential.
Looking forward, Brookfield aims to increase its fee-bearing capital pool by scaling existing offerings and rolling out new investment strategies. As this capital base grows, so will the firm’s management fees, creating a steady stream of additional income.
Further, Brookfield’s expansion in investment-grade credit to support its insurance solutions augurs well for growth. This move has bolstered the growth of Brookfield Wealth Solutions. The company has launched its first separately managed accounts (SMAs) tailored to insurance clients, delivering customized credit strategies. This is a promising new channel that could significantly boost future fundraising efforts.
Brookfield has also strengthened its platform through a series of strategic acquisitions. These recent additions are expected to generate an incremental $70 million in annualized fee-related earnings, further diversifying and scaling its operations.
With substantial capital at its disposal, exposure to high-growth sectors, and operating efficiency, Brookfield Asset Management is in an excellent position to deliver double-digit earnings growth in 2025 and beyond. This will enable it to pay higher dividends and deliver above-average capital gains.
