This Dividend Stock Keeps Quietly Raising Its Payout, and I Love It

BAM is still a relatively young dividend stock, but its impressive dividend growth, recurring earnings, and exposure to powerful long-term trends make it a solid idea for Canadian investors looking for both income and growth.

Key Points
  • Brookfield Asset Management (TSX:BAM) has quietly increased its dividend since 2023, delivering about a 16% CAGR and has a current yield near 3.8%.
  • Its recurring, fee-based earnings, US$672B fee-bearing capital and roughly US$1.3T AUM — plus demand from AI/digital infrastructure and the energy transition — support management’s 15% dividend-growth target (a more conservative ~10% is seen as realistic).
  • Main risks are the short dividend history and sensitivity to fundraising, valuations and economic cycles, but the author likes BAM as a buy-on-dips for long-term income and growth.

When it comes to dividend stocks, investors often gravitate toward companies with decades-long track records of steadily increasing their payouts. And for good reason. A long history of dividend growth can provide valuable evidence that a company has the ability and is committed to rewarding shareholders.

But sometimes, it pays to look beyond the usual suspects.

One dividend stock that has quietly been increasing its payout is Brookfield Asset Management (TSX: BAM). The company was spun off from its parent in December 2022 and began raising its dividend in 2023. That means its dividend-growth track record is still in its infancy.

Investors probably want to pay attention.

Since 2023, Brookfield Asset Management has increased its dividend at a compound annual growth rate of roughly 16%. That’s a remarkable pace, particularly for a company that already offers a relatively attractive yield.

The big question is whether BAM can keep the momentum going.

dividends grow over time

Source: Getty Images

A business built for recurring revenue

Brookfield Asset Management is a global alternative asset manager with more than 25 years of experience investing in assets that are essential to the global economy. Its investments span infrastructure, energy, private equity, real estate, and credit.

What makes the business particularly appealing to dividend investors is the recurring nature of its earnings.

BAM generates fee-based revenue supported by long-duration capital and a diversified collection of investment strategies. As the company raises more capital and expands its assets under management, it has an opportunity to increase its fee-bearing earnings without necessarily taking on proportionally greater risk.

And there are some enormous secular trends working in its favour.

The rapid expansion of artificial intelligence and digital infrastructure requires massive investment. So does the global energy transition. Brookfield is positioned to deploy capital into many of these opportunities, potentially creating a long runway for future growth.

The dividend still has room to grow

BAM isn’t shy about its dividend ambitions. Management targets long-term dividend growth of at least 15%, with a payout ratio of 90% to 95% of distributable earnings.

Can it deliver?

Recent results provide plenty of encouragement. In the 12 months ended June 2026, fee-related earnings increased 19%, while distributable earnings climbed 12%. During the same period, BAM raised US$163 billion, taking its fee-bearing capital to US$672 billion and assets under management to approximately US$1.3 trillion.

Those are impressive numbers.

Still, I wouldn’t build an investment thesis around a sustained 15% dividend-growth rate. A more conservative expectation of roughly 10% annual growth seems reasonable to me. Even that would put BAM well ahead of many traditional Canadian dividend stocks.

And investors are being paid to wait. BAM’s recent dividend yield of approximately 3.8% is significantly higher than the roughly 2% yield of the broader Canadian market.

Why I like BAM

This is what makes Brookfield Asset Management stand out to me.

You have a dividend yield that’s already above average, combined with the potential for above-average earnings and dividend growth. That’s a powerful combination for long-term investors.

Of course, BAM isn’t risk-free. Its relatively short dividend history means we don’t yet know how it will perform through multiple market cycles. Alternative asset management can also be affected by economic conditions, fundraising activity, asset valuations, and investor sentiment.

But I believe the long-term opportunity outweighs those concerns.

BAM has a growing capital base, recurring fee-related earnings, exposure to major global investment trends, and an ambitious dividend policy. For investors who want an income stream that could grow substantially over time, that’s a combination worth considering.

I wouldn’t chase the stock at any price. But if the market gives investors a meaningful pullback, Brookfield Asset Management is a dividend stock I’d be happy to buy on dips.

Fool contributor Kay Ng has positions in Brookfield Asset Management. The Motley Fool recommends Brookfield Asset Management. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Person holding a smartphone with a stock chart on screen
Dividend Stocks

For BCE vs. Enbridge, a 5.7% Yield vs. 5.9% (And the One I’d Prefer for Income)

Both BCE and Enbridge offer attractive income, but BCE is a higher-risk turnaround opportunity, whereas Enbridge offers a more predictable…

Read more »

man shops in a drugstore
Dividend Stocks

How Much to Invest in RioCan for $300 a Month in Dividends

How much should you invest in RioCan for $300 a month in dividends? Explore its retail business, monthly payout and…

Read more »

A close up color image of a small green plant sprouting out of a pile of Canadian dollar coins "loonies."
Dividend Stocks

Telus Dividend Safety: Is the Stock Still Worth Buying for Income?

Explore the latest insights on Telus dividend amid a challenging earnings report and management's new Transformation Strategy.

Read more »

voice-recognition-talking-to-a-smartphone
Dividend Stocks

BCE Just Reported: What $10,000 Could Earn You in Dividends Today

BCE is yielding a very generous 5.2%, as the company's telecom business improves and long-term investments drive growth.

Read more »

Transparent umbrella under heavy rain against water drops splash background. Rainy weather concept.
Dividend Stocks

Is Intact’s Rough Quarter a Blip or the New Normal for Canadian Insurers?

Intact reported $660 million in pre-tax catastrophe losses during the quarter, which dragged its net operating income per share lower.

Read more »

investor faces bear market
Dividend Stocks

How Much to Invest in BCE for $1,500 a Year in Dividends

BCE (TSX:BCE) could be a huge dividend value winner as the stock markets correct and potentially flirt with a bear…

Read more »

diversification is an important part of building a stable portfolio
Dividend Stocks

Want $6,000 a Year From Your TFSA? Here’s the Portfolio Size to Aim for

A $150,000 starting target can support a $6,000 annual TFSA income goal without requiring an extreme yield.

Read more »

top TSX stocks to buy
Dividend Stocks

Hot Take: The Best Monthly Dividend Stock on the TSX Right Now

For investors seeking monthly dividend payments, this REIT has a history of consistent dividend payments across different market conditions, along…

Read more »