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.
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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.
