There’s no question that Brookfield Corporation (TSX: BN) and the other Brookfield stocks give Canadian investors a tonne of ways to benefit from long-term growth in the global economy.
The investing giant owns infrastructure and power assets around the world, buys and improves businesses, and gets paid to manage money for other investors.
However, if you decide you want to invest in Brookfield, you still have to figure out which Brookfield stock to buy.
There are several different Brookfield stocks to choose from on the TSX, and they all offer exposure to different projects and different long-term investing trends.
And to make matters even more confusing, some of the different tickers actually offer exposure to the same underlying business.
So, if you’ve been thinking about investing in some of the Brookfield stocks because of their long-term growth potential and impressive management track record, here’s how you can narrow down the choices.
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The two broadest Brookfield companies
The first stock to understand, and the parent company, is Brookfield Corporation, which is the one that trades under the ticker BN.
BN owns a majority stake in Brookfield Asset Management (TSX: BAM), along with significant interests in its infrastructure, renewable power and private-equity businesses. It also owns real estate and its growing insurance operations.
That’s why BN is the simplest choice if what appeals to you is Brookfield’s track record of finding opportunities across different industries and putting money to work wherever management sees the most potential.
Brookfield Asset Management is a different choice because it focuses specifically on raising and managing money for clients. So, as it attracts more capital to invest across strategies such as infrastructure, renewable power, real estate and credit, it can earn more fees.
So, if it’s Brookfield’s ability to attract capital and manage investments that interests you most, BAM gives you more direct exposure to that business. It also offers a much higher dividend yield than BN, at roughly 4.4% compared to just 0.75%.
You may also come across Brookfield Wealth Solutions (TSX: BNT), Brookfield’s insurance business. Its shares are exchangeable one-for-one into BN shares, and shareholders have approved a plan to combine the two stocks, although the transaction hasn’t closed yet.
When a more focused Brookfield stock makes sense
Owning the whole business can make a lot of sense to investors who want exposure to all of Brookfield’s sectors. However, if you’re particularly interested in infrastructure, for example, Brookfield Infrastructure Partners (TSX: BIP.UN) and Brookfield Infrastructure Corporation (TSX: BIPC) are the stocks to look at.
Both give you exposure to the same utilities, transportation networks, pipelines and data infrastructure, with several ways to benefit as the world builds and upgrades essential assets.
Brookfield Renewable Partners (TSX: BEP.UN) and Brookfield Renewable Corporation (TSX: BEPC), meanwhile, both give you exposure to Brookfield’s hydroelectric, wind, solar and storage assets. They’re the more direct choices if you want to benefit from growing electricity demand.
The difference within each pair is how you own the business. BIP.UN and BEP.UN are partnership units that pay distributions, while BIPC and BEPC are corporate shares that pay eligible Canadian dividends and come with simpler tax reporting.
That difference can affect your tax reporting and, depending on your account and tax situation, the amount you ultimately keep. However, Brookfield has also proposed combining each pair into a single corporate stock.
Finally, there’s Brookfield Business Corporation (TSX: BBUC), which owns industrial and services businesses that Brookfield aims to improve and eventually sell or use to fund new investments.
That makes it worth considering if you specifically want exposure to Brookfield’s business-buying strategy, although its returns will depend more heavily on how well those individual investments work out, so it’s a more specialized choice than BN.
The best part is that you don’t need to own every ticker to benefit from Brookfield’s track record. You can buy BN for exposure to the whole business, choose a more focused stock based on where you see the most long-term potential, or own both to put a little more money behind the part of Brookfield you like most.
