While there are many dividend stocks to choose from, finding a long-term winner can be difficult. With the global economy and stock market in a state of flux, it’s more important than ever to find quality companies that can withstand any headwinds.
One compelling dividend plays that income investors could hold for the long term is Brookfield Asset Management.
Brookfield Asset Management 101
Brookfield Asset Management is a Canadian asset management company founded in 1899. The company has over $725 billion in assets under management, making it one of the largest asset managers in the world. With such a storied history and massive size, Brookfield has remained a force in the industry, despite going through many economic cycles.
This resilience is due to Brookfield’s focus on quality assets. The company only invests in properties that are essential to the functioning of society, such as transportation infrastructure, energy assets, and office buildings. These assets are less likely to be impacted by an economic downturn, which helps protect Brookfield’s investors from downside risk.
Brookfield generated $12 billion in net income through its investment strategies in 2021.
The Team Behind Brookfield Asset Management
Brookfield is led by CEO Bruce Flatt, who has been with the company since 1985. Flatt’s investment philosophy is based on the concept of value investing, an investment strategy focusing on buying assets undervalued by the market.
This philosophy has helped Brookfield generate solid returns for its investors over the years and has drawn comparisons to legendary investors such as Warren Buffett.
Under Flatt’s leadership, Brookfield has become one of the most successful asset managers in the world.
Why Is Brookfield a Compelling Dividend Investment?
Many factors make up a compelling dividend investment. These include:
- A long history of success
- A well-respected management team
- A strong track record of dividend growth
- A high dividend yield
Brookfield currently has a 1.4% dividend yield. While many investors deem the 2%–4% range the sweet spot for dividend yields, Brookfield offers a desirable yield, considering its long history of success and strong management team.
As a stable and well-established company, Brookfield is an excellent choice for investors looking to pad their portfolios with a reliable dividend stock.
Brookfield Asset Management’s Outlook
The company’s outlook is positive, with robust growth prospects in its core businesses. Brookfield is well-positioned to capitalize on opportunities in the global economy, thanks to its extensive footprint and world-class expertise.
The diversity of Brookfield assets allows it to shift its focus and investment dollars to where it sees the most opportunity. If the economy struggles in one region, Brookfield can move its money to another part of the world where conditions are more favorable. For example, suppose the U.S. economy takes a hit. In that case, Brookfield can rely on communication towers in India, power generation in Colombia, logistic operations in Brazil, and telecom companies in France to drive growth.
At the end of 2021, Brookfield had $364 billion of fee-bearing capital. This refers to the amount of money Brookfield has under management that is generating fees for the company. This is an important metric to track because it is a significant driver of Brookfield’s revenue.
The capital was distributed among the company’s core segments: renewable power and transition ($48 billion), infrastructure ($68 billion), real estate ($82 billion), credit and other ($132 billion), and private equity ($34 billion).
In addition to its strong position in the current markets, Brookfield also has a significant pipeline of future investments. The company raised a record $15 billion for a global transition fund that will be used to invest in companies and infrastructure that are leading the way in the fight for a net zero carbon economy.
The fund will target investments in several key areas:
- Renewable power
- Electric vehicles
- Battery storage
- Carbon capture, utilization, and storage
Brookfield is also looking to invest billions of dollars in the rollout of 5G wireless networks worldwide. The company has already made significant investments in this area and sees immense potential for growth in the years ahead.
Brookfield is well-positioned to continue delivering solid returns to shareholders. The company has a healthy balance sheet, ample liquidity, and a portfolio of high-quality assets. These factors provide a foundation for continued growth and profitability in the years ahead.
In conclusion, Brookfield Asset Management is a compelling dividend investment for several reasons:
- Brookfield has a diversified portfolio of high-quality assets that generate stable cash flow.
- The company has a strong balance sheet and ample liquidity to support its dividend payments.
- Brookfield’s management team is experienced and shareholder-friendly.
Given all these factors, Brookfield is an attractive dividend stock for income-seeking investors.