Valued at a market cap of $106 billion, Brookfield Asset Management (TSX:BAM) is among the largest alternative asset managers globally. Down almost 25% from its 52-week high, BAM stock currently offers you a forward dividend yield of 4.4%.
In this article, I break down why this top dividend stock deserves a spot in a buy-and-hold portfolio.
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Is this Canadian dividend stock a good buy?
Brookfield manages money for large institutions, insurance companies, and individual investors. It earns fees for managing that capital across real estate, infrastructure, private equity, renewable power, and credit.
Brookfield’s management fees account for the majority of its distributable earnings. Around 95% of its fee revenue is tied to long-term perpetual capital, providing the company with a predictable earnings base.
Notably, Brookfield pays out more than 90% of its distributable earnings to shareholders as dividends. For income-focused investors, it offers a combination of growth and consistent dividend payouts.
During Brookfield’s Q1 earnings call, CEO Connor Teskey said the company expects 2026 to be a record year, one where it will exceed its own long-term growth targets.
In Q1, it grew fee-related earnings by 11% year over year to US$772 million, while distributable earnings stood at US$702 million. In the last 12 months, fee-related earnings rose 18% to US$3.1 billion.
Brookfield also raised US$21 billion in new capital during Q1. This includes money tied to the Just Group insurance mandate and its flagship private equity fund. In the first four months of 2026, it raised US$67 billion, compared with US$112 billion in 2025.
Fee-bearing capital grew 12% over the past year to US$614 billion. Every dollar added to that pool is a source of steady, recurring income for years to come.
What next for the TSX dividend stock
Three tailwinds are pushing Brookfield’s business forward:
- First, Teskey noted the company expects to complete around US$20 billion in real estate transactions over a two-month period, driven by hotels, logistics, and housing.
- Second, data centres, power generation, and computing infrastructure require the kind of real assets Brookfield owns and operates at scale.
- Third, Brookfield is closing its acquisition of Oaktree, a major credit investor. Co-CEO Armen Panossian explained that combining the two firms creates one of the strongest opportunistic credit platforms in the world, ready to act if credit markets tighten further.
Meanwhile, management believes Brookfield’s shares are undervalued. The company bought back US$375 million of stock in the first quarter and another US$200 million so far in the second quarter, bringing total buybacks over the past seven months to nearly US$800 million.
The Foolish takeaway
Brookfield Asset Management checks a lot of boxes that patient, income-focused Canadian investors look for.
Its earnings are mostly fee-based and highly recurring, the dividend payout ratio is generous, and its growth targets are ambitious but backed by real momentum in fundraising, real estate, credit, and artificial intelligence infrastructure.
The 25% pullback in the Canadian dividend stock does not appear to reflect any weakness in the underlying business.
For Canadians looking to add a dividend-paying compounder to a buy-and-hold portfolio, Brookfield Asset Management should be part of your watchlist.
Analysts tracking the dividend stock forecast adjusted earnings per share to expand from US$1.65 in 2025 to US$3.39 in 2030. If BAM stock is priced at 25 times forward earnings, which is below the three-year average, it could return more than 100% over the next four years.
