Brookfield Asset Management (BAM 1.47%) is one of the largest asset managers in Canada. It has a long and successful history of investing globally in infrastructure assets. The company has ambitious plans that, if executed, could result in the doubling of its dividend. Here's why this stock could be an attractive buy for dividend growth, growth and income, and growth investors right now.
What's Brookfield Asset Management's plan?
As an asset manager, Brookfield Asset Management charges its customers fees based on the dollar value of the assets it manages. For most asset management companies, the key figure is assets under management (AUM). However, Brookfield Asset Management manages a significant portion of its own capital. It provides the figure fee-bearing capital for investors to monitor.
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Management expects to roughly double its fee-bearing capital from $560 billion to $1.2 trillion between 2025 and 2030. That's a huge increase that would have a material impact on the company's earnings and dividends. On the earnings front, the company expects fee-related earnings to increase 17% per year. That should be more than enough to support the company's goal of 15% annualized dividend growth.
This is where basic math comes into play regarding the stock price and the dividend. Brookfield Asset Management's dividend yield is currently roughly 3%. If the dividend grows at 15% a year through 2030, it would roughly double in size. For the yield to remain the same as it is today, the stock price would have to double. Conversely, if the stock price didn't move, investors would see the dividend yield double. It seems more likely that the stock price will rise, at least to some degree.
Overall, management's plan appears to position Brookfield Asset Management as an attractive investment for growth investors, growth and income investors, and dividend growth investors. But can the company meet its goal?
Brookfield Asset Management has done this before
A straightforward way to answer that question is to examine what Brookfield Asset Management has accomplished in the past. It roughly doubled its fee-bearing capital from $277 billion in 2020 to just over $550 billion in 2025. To be fair, it is easier to double the size of a smaller business. So the next double will be harder to achieve.
Still, Brookfield Asset Management is undertaking this task with a well-defined plan, one that has proven successful in the past. It has three investment themes it is targeting: de-globalization, de-carbonization, and digitization. It has five investment platforms utilizing these themes: infrastructure, real estate, clean energy, private equity, and credit. Meanwhile, the company's playing field is global, so it can execute its growth plan anywhere in the world.
NYSE: BAM
Key Data Points
As an asset manager, the ups and downs of Wall Street will likely play an important role in the company's success. Therefore, a bear market in the next five years could make it harder to achieve management's goals. However, since bull markets eventually follow bear markets, it seems likely that a market downturn would simply delay Brookfield Asset Management's plans, not completely derail them.
Brookfield Asset Management is worth a deep dive
Buying Brookfield Asset Management today requires investors to trust that management can deliver on its lofty goals. Given the history of doing just that, it seems like a worthwhile risk to take. In fact, even if management only grows its business 75%, or even just 50%, the outcome should still be quite positive for shareholders. If you are a long-term investor (with a growth, dividend growth, or growth and income focus), you should dig into Brookfield Asset Management's long-term growth plan right now.
