Valued at a market cap of over $9 billion, Brookfield Business Partners (TSX:BBU.UN) has returned close to 50% to shareholders in 2025. Brookfield Business Partners operates as a diversified private equity firm that targets long-term returns of between 15% and 20%.
The company’s portfolio spans three main segments.
- Business Services represents the largest exposure, holding a 41% stake in residential mortgage insurer Sagen, 35% in fleet management provider Unidas, and 19% in dealer software company CDK Global.
- Infrastructure Services includes a 33% interest in lottery operator Scientific Games and 28% in modular building provider Modulaire.
- The Industrials segment includes a 28% investment in energy storage company Clarios and a 21% investment in engineered components manufacturer DexKo.
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Brookfield Business Partners focuses on accretive acquisitions
Since spinning off from Brookfield Corp in 2016, the partnership has deployed almost US$8 billion across 22 acquisitions. Recent additions include Chemelex in January 2025 and Antylia Scientific in May 2025, both in the industrials segment. The firm typically acquires majority controlling stakes in market-leading providers of essential products and services.
Brookfield’s competitive advantages include global operational expertise, access to Brookfield’s broader platform, and an operations-oriented approach focused on executing improvement plans to enhance EBITDA (earnings before interest, tax, depreciation, and amortization) and cash flows.
The partnership maintains strong balance-sheet discipline by using appropriate non-recourse borrowings while preserving liquidity to fund future growth opportunities across its diversified portfolio.
Brookfield Business pays shareholders an annual dividend of US$0.25 per share, which translates to a forward yield of 0.7%. While the dividend yield is not attractive, Brookfield Business offers significant upside potential to long-term shareholders.
The bull case for the TSX dividend stock
Brookfield Business Partners delivered strong third-quarter results while making significant progress on its capital recycling strategy and growth initiatives. The company generated over US$2 billion in proceeds since the start of the year, using US$1 billion to pay down corporate debt while investing US$525 million in three strategic acquisitions, including First National, which closed at the end of October.
The business repurchased just over US$160 million of its units and shares as part of a US$250 million buyback program launched in February. Management emphasized that despite a 150% increase in the share price over the past two years, the stock continues to trade at a discount to net asset value, presenting what they believe is an attractive entry point for investors.
Brookfield Business reported an adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of US$575 million in Q3, down from US$844 million in the year-ago period. However, after adjusting for tax benefits and changes in ownership stakes, the EBITDA grew year over year.
Brookfield’s adjusted earnings from operations stood at US$284 million as it benefited from lower current tax expenses, while it advanced the energy storage business and reduced interest costs.
Looking ahead, the company appears well-positioned with approximately US$2.9 billion in pro forma liquidity at the corporate level. The financing environment remains favourable, with public markets at record highs and transaction activity picking up as interest rates decline.
Management expressed cautious optimism about finding attractive deployment opportunities amid an excellent investment environment, while maintaining a disciplined approach to capital allocation and continuing to execute a proven strategy of acquiring and transforming market-leading businesses.
Brookfield Business is forecast to end 2027 with an adjusted funds flow per share of US$6, up from $4.84 in 2025. If the TSX stock is priced at 10 times AFFO, it should gain over 80% over the next 15 months. Bay Street remains bullish and expects the stock to surge 17%, given consensus price targets.
