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What's the Best Brookfield Stock to Buy Now?

By Jason Hall - Nov 29, 2020 at 6:55AM

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The alternative asset manager and its subsidiaries have all delivered wonderful returns for investors. An expert offers his opinion on which is the best buy now.

Alternative assets can be lucrative, but also risky if you're not partnered with skilled operators and asset managers. That's why Brookfield Asset Management ( BAM 3.23% ), and subsidiaries Brookfield Infrastructure ( BIP 0.73% )( BIPC 0.88% ) and Brookfield Renewable ( BEP 1.38% )( BEPC 1.42% ) are appealing investments. Not only are they great vehicles to invest in alternative assets like infrastructure, renewable energy production, and real estate, but Brookfield's management also has a wonderful track record of delivering market-beating returns. 

But which Brookfield investment is the best buy right now? On the Nov. 10 edition of "The Wrap" on Motley Fool Live, host Jason Hall answers that question for a listener. 

Transcript:

Brian Feroldi: Jason, What's the best Brookfield stock to buy now?

Jason Hall: That's a good one. This actually was from the very end of the last hour. and I knew this was going to come up. It's tough because there's a couple of things that you have to consider.

First of all, you have Brookfield Asset Management. That's the parent entity that makes its money, mainly, the bulk of its income comes from asset management fees. For high wealth investors, institutional investors like retirement funds and that kind of stuff, they go to it as an expert in alternative assets. So you think about real estate, corporate debt, other ways to make money besides buying and selling stocks, they're really, really good at that.

Now, they also have all of these subsidiary companies, Brookfield Infrastructure, which is BIP. This is worth the conversation -- it gets convoluted -- each of these subsidiaries trade as either a master limited partnership, which is the three-digit ticker, so Brookfield Infrastructure as BIP. They are also available as an economic equivalent as a corporation. So Brookfield Infrastructure -- as BIPC -- trades at a higher price because there's a premium to own it as a corporation versus a limited partnership. I'm not going to get into the specifics here because it would take 20 minutes.

Brookfield Infrastructure owns things like water lines, and natural gas distribution, and toll booths, and toll roads, and all this kind of stuff, telecommunications infrastructure. Then, Brookfield Renewable, BEP and BEPC, is hydroelectric, wind, and solar energy generation that it sells. I think Brookfield Renewable has been the best investment this year maybe for the past couple of years. It has a wonderful track record ahead of it as renewables continue to get cheaper and demand continues to grow.

I think Brookfield Infrastructure is probably the best value right now. I think it's generally probably the lowest returns this year, has the highest dividend yield, and it still has incredible, wonderful prospects. Those are my two favorite. I think for income investors, they're both tremendous investments. Dividend growth investors, they're both tremendous. I think if I were buying today, I would probably buy Brookfield Infrastructure. Brookfield Asset Management, it's less a play on dividends and more a play on capital growth of them being able to capture more and more assets under management and earn more from fees for managing those assets for investors. I tend to prefer Brookfield Infrastructure. Right now, it's my favorite of all those.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Brookfield Infrastructure Partners L.P. Stock Quote
Brookfield Infrastructure Partners L.P.
BIP
$56.78 (0.73%) $0.41
Brookfield Asset Management Inc. Stock Quote
Brookfield Asset Management Inc.
BAM
$57.29 (3.23%) $1.79
Brookfield Renewable Partners L.P. Stock Quote
Brookfield Renewable Partners L.P.
BEP
$34.46 (1.38%) $0.47
Brookfield Infrastructure Corporation Stock Quote
Brookfield Infrastructure Corporation
BIPC
$60.50 (0.88%) $0.53
Brookfield Renewable Corporation Inc. Stock Quote
Brookfield Renewable Corporation Inc.
BEPC
$35.05 (1.42%) $0.49

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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