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Brookfield Asset Management Reports Best-Ever Quarter, Boosts Dividend by 8%

By Neha Chamaria - Feb 11, 2021 at 2:27PM

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Flush with cash, the company is looking forward to a strong 2021.

Brookfield Asset Management (BAM 0.17%) is firing on all cylinders. The alternative asset manager reported stellar numbers for its fourth quarter and gifted investors with a dividend increase on the morning of Feb. 11.

Brookfield's Q4 was its best ever as net income and funds from operations (FFO) shot through the roof. Here are key numbers from the quarter, all year over year:

  1. Revenue slipped 4% to $17.1 billion.
  2. Net income jumped 10.8% to $1.8 billion.
  3. FFO surged 74% to $2.1 billion.

The record quarter sets Brookfield on track for a strong 2021. Importantly, Brookfield invested a whopping $44 billion in 2020 and has an even larger amount at its disposal right now, which should drive the company's "next phase of growth" in 2021.

Night view of skyscrapers.

Image source: Getty Images.

Thanks to solid fee-based earnings and gains from asset disposals in Q4, Brookfield ended 2020 with a record $3.1 billion in cash available for distribution and/or reinvestment (CAFDR), reflecting resiliency of its cash flows.

Flush with cash, management announced an 8% hike in its quarterly dividend. The stock currently yields 1.2%.

Brookfield expects 2021 to be a strong year. "We recently started our next round of flagship fundraising, are making progress on significant realizations from earlier vintage funds, and underlying business performance is good and getting better," said CEO Bruce Flatt. Brookfield is currently raising funds for its fourth flagship real estate fund, and expects to launch private equity and infrastructure flagship funds later this year. Earlier this year, Brookfield also revealed plans to take its property company, Brookfield Property Partners (BPY), private.

Brookfield had $77 billion in deployable capital as of the end of Q4. In its letter to shareholders, management elaborated some of the new areas it is keen to invest in, such as:

  1. Reinsurance.
  2. Technology investing.
  3. Net-zero carbon emission applications.

If Brookfield Asset Management could earn record FFO of $5.2 billion in a year when nearly 20% of its businesses were shut because of the COVID-19 pandemic, it should be able to deliver even stronger results going forward as global economic activity picks up. The stock is up roughly 3% so far this year.

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