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Recent Buy - Brookfield Asset Management

Brookfield Who?

Brookfield Asset Management (TSE: BAM.A | NYSE: BAM) is diversified globally in business units of real estate, infrastructure (energy), renewable power, private equity, and credit. While it is possible to obtain shares of each business unit individually, I decided to add their asset management unit, one producing a constantly growing revenue and free cash flow.

The recent weakness in the economy and stock market opens up major opportunities for asset management companies. With 30 billion dollars of capital invested and a sizable cash position of 10 billion dollars, I expect the company's excellent leadership and management to jump on opportunities sooner rather than later.

Furthermore, the recent acquisitions disclosed by insiders fueled my confidence in the future of the company even after a steep drop in the share price. Speaking of the drop, the company also underwent a 3 for 2 stock split on April 1st, 2020, which accounted for a noticeable decline in share price on most financial graphs.

Dividend History and Safety

Year EPS Dividend Payout Ratio
2019 1.19 0.43 36.13%
2018 2.31 0.40 17.32%
2017 0.91 0.37 40.66%
2016 1.05 0.35 33.33%
2015 1.55 0.32 20.64%

While their current dividend yield is nothing to write home about and a meager ~1.5% depending on the current sentiment of the market, Brookfield Asset Management has an outstanding growth (9.2% pa) and low payout ratio.

Moreover, shareholders can look back on a history of 8 years of consecutive dividend increases, and even with COVID19 dominating at least Q1 and Q2 of the global economy, BAM announced a 12.5% dividend increase in February 2020.

Disclaimer

I hold long positions in the following stocks mentioned in this article: Brookfield Asset Management (TSE: BAM.A). This article expresses personal opinions and observations of someone who is not licensed to provide financial advice. I am not receiving compensation for writing this analysis and have no business relationship with any company whose stock is mentioned in this article other than the long positions I own.

I cannot guarantee the accuracy of the financial metrics gathered from 3rd party services like Morningstar and Yahoo Finance.

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