If you could only own one Canadian stock for the rest of your life, Brookfield Asset Management (TSX:BAM) should be at the top of your list. While no investor should ever truly go all-in on a single equity, BAM makes a compelling case as the ultimate long-term compounder — a stock to buy on dips and hold for a long time.
Source: Getty Images
A proven compounder with global reach
Brookfield Asset Management has delivered a stunning 45% total return over the past 12 months, reminding investors why it’s often seen as one of the best-run asset managers in the world. Even though such explosive returns aren’t sustainable every year, the company’s long-term growth runway is firmly intact.
This year, the growth stock experienced a significant pullback — sliding more than 30% from its peak of about $85 to a low of about $58. This drop was largely tied to macro-level uncertainty, particularly around tariffs and trade policy. However, what happened next was telling: BAM rebounded within months, showcasing the underlying strength and quality of the business.
Since BAM was spun off from its parent company in late 2022, the stock has nearly doubled investors’ money.
An asset-light giant with a trillion-dollar scale
Brookfield Asset Management isn’t your typical Canadian company. It’s a leading global alternative asset manager, overseeing more than US$1 trillion in assets under management (AUM). These assets span multiple high-value sectors, including renewable power, infrastructure, private equity, real estate, and credit. Notably, half of its AUM is fee-bearing, generating stable, recurring cash flow through management and performance fees.
What sets BAM apart is its capital-light business model. With minimal debt, ample liquidity, and robust cash flow from fees, the company is uniquely positioned to scale. It doesn’t need to stretch its balance sheet to grow, which gives it resilience in down markets and leverage in up cycles.
BAM also benefits from a powerful ecosystem through its close relationship with Brookfield Corporation. This wider network operates across +30 countries and over 300 businesses, giving BAM unrivalled insight into global trends, value opportunities, and emerging themes.
Unlike many asset managers who are passive investors, Brookfield is both an owner and operator, actively improving the assets it owns, which further boosts returns over time.
Positioned for long-term outperformance
The global shift toward alternative assets — like infrastructure, renewables, and private equity — plays right into Brookfield’s hands. Institutional investors are expected to increase their allocations to these strategies, and BAM is already one of the top choices to manage that capital.
Management projects that the firm’s AUM could double over the next five years, which implies a double-digit annual growth rate. That kind of growth not only supports higher earnings but also a rising dividend, making the stock a compelling choice for both income and capital appreciation.
After a 22% rally in just the last three months, the stock may appear fully valued in the short term. But long-term investors shouldn’t be discouraged. Instead, they should stay patient and look for opportunities to accumulate shares during meaningful market corrections. BAM’s track record, scale, and strategy make it a rare find — a stock you can buy, hold, and forget (almost).
Investor takeaway
If you’re seeking a Canadian stock to anchor your portfolio for life, Brookfield Asset Management is as close to a forever stock as you’ll find, especially if you buy shares on meaningful pullbacks.
