Brookfield Asset Management (BAM +0.00%) has an $88 billion market cap, which isn't huge in the world of finance. But the asset manager has an over 100-year history of successfully investing on behalf of itself and its clients. That kinda success tends to attract investors who want to get in on what Brookfield is doing.
And yet, the stock is currently trading down about 12% from its recent highs, working its way back from a decline of more than 25%. What was weighing on this stock, and is it a buy after the partial recovery?
What does Brookfield Asset Management do?
Brookfield Asset Management manages money for other people (and for itself). It makes money by charging clients fees for the services it provides. At the end of 2024, the asset manager had over $1 trillion in assets under management and roughly $500 billion or so of fee-bearing capital. In 2024, Brookfield Asset Management generated $2.5 billion in fees.
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The company's investment profile spans five areas: renewable power, infrastructure, real estate, private equity, and credit. It is a sizable player in each segment, with the smallest of these businesses being renewable power, with roughly $125 billion in assets under management. Notably, the company's investments span the globe, with operations in 30 countries.
In addition, Brookfield Asset Management also has notable access to capital. It breaks down its capital sources into four groups: institutional investors, insurance solutions, private wealth, and public markets. The first two categories are basically large financial entities. Private wealth is really a way to say rich customers. Public markets, meanwhile, is composed of a collection of controlled businesses that trade on public exchanges and represent permanent capital.
All in, Brookfield Asset Management is a well-diversified business with a well-diversified customer base. Now add in an attractive dividend yield of 3.3%, which is well above the market's average 1.3% yield and the average finance company's yield of 1.4%. This is a pretty compelling investment story, but it gets even better.
Brookfield Asset Management is about growth
So far, the description of Brookfield Asset Management has focused on what it is today, which is a logical starting point for any investment conversation. But the really interesting story here is about what this asset manager plans to become in the near future. The answer is bigger -- much bigger.
As noted, Brookfield Asset Management ended 2024 with roughly $500 billion in fee-generating assets. By the end of 2029, it expects to double that figure to around $1 trillion. Each and every business is expected to expand materially over that period, some more than doubling in size. This should fuel growth in another area.
NYSE: BAM
Key Data Points
In early 2025, Brookfield Asset Management announced a huge 15% dividend increase. That's five times the historical rate of inflation growth. It was a very large increase by any measure. But that was based on the company's 2024 results. Given its future growth plans, management is calling for annual dividend growth of 15% through to 2029.
So, this isn't just a growth opportunity for investors. It is a growth and income opportunity. And that should be very attractive to dividend investors across a broad spectrum, highlighting again that the stock currently has an above-peer dividend, too.
Is Brookfield Asset Management a buy now?
Brookfield Asset Management's business is going to ebb and flow along with the market to some degree. That goes some way to explaining why the stock price is down a bit right now. However, given that it is focused on areas that are more long-term in nature (infrastructure), it should have a sticky base of assets under management.
If you can handle the inherent volatility of an asset manager, the relatively high yield and dividend growth plans here will likely make for a very enticing buying opportunity for long-term investors.
