Looking to hit ultra-wealth status in your lifetime? Then Brookfield Asset Management (TSX: BAM) could be the stock you want to choose. This asset manager with a diverse range of investments has long shown it can provide conservative yet strong growth. So today, let’s look at what this Canadian stock has done to warrant your attention.
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Into earnings
First, let’s dive into earnings. The Canadian stock currently has assets under management of about $1 trillion, with fee-bearing capital at $563 billion, a 10% year-over-year increase. What’s more, $22 billion was raised in the second quarter, with $97 billion raised over the last year. This is another growth engine for future base fees.
Speaking of fees, those related earnings rose 16% year over year, with distributable earnings up 12%. During the quarter, Brookfield deployed $28 billion of equity, monetizing about $36 billion of assets year to date, thus showing active capital recycling and even more gains.
The quarter also saw large transactions and government/corporate partnerships. These help reinforce even more future growth, as well as its solid dividend, currently annualized at $1.75 per share.
Value and income
Speaking of income, BAM stock’s 3% yield at writing is not only well supported but valuable at these levels. It currently trades at 41 times earnings, which seems high but is typical for asset managers with substantial off-balance sheet asset exposure.
Plus, there’s the future to look towards. Growth is accelerating, with net income rising 25% year over year, and operating cash flow and free cash flow healthy in the last year. These are great growth drivers not just for shares, but for dividends as well.
And this is all happening while the company maintains a stellar balance sheet. Corporate liquidity is a bit low at $1.5 billion, but patient, long-term investors will love the exposure to alternative asset classes, including infrastructure, renewables, private equity, real estate, and credit. These can help support wealth in the long run thanks to diverse, essential core holdings.
Bottom line
For income investors wanting predictable cash returns along with stable long-term growth, BAM stock can be a prime option. In fact, if you were to invest about $20,000 into BAM stock, here is what that could look like for investors on the TSX today, bringing in almost $600 in annual dividend income! That is certainly something to consider.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| BAM | $81.19 | 246 | $2.41 | $592.86 | Quarterly | $19,975 |
So there you have it. BAM stock does have its issues, as any stock does. However, this is a highly diversified income stock that can provide investors with solid income for not just years, but decades to come. It’s like buying a position in your very own fund of properties, ones that span not just different sectors, but the world over. Though, of course, every person is different. So investors should always meet with their financial advisor before considering any investment, including one like BAM stock.
