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The Brookfield brand is one of the most trusted in the alternative asset management industry. Many investors have a fondness for the original Brookfield, which split into Brookfield Corp. (TSX:BN) and the higher-yielding Brookfield Asset Management (TSX:BAM). Both companies are exceptionally well-managed, with outstanding leadership at the helm. While one may offer a slight edge over the other, value investors can benefit from holding either or both as part of a diversified portfolio.
Ultimately, Brookfield is a powerhouse in the financial sector. Although BAM and BN stocks may outperform each other over different periods, Canadian investors should consider their own priorities when evaluating these stocks.
For those seeking passive income, BAM is the more attractive option, offering a generous 3.75% dividend yield at the time of writing. Although the asset manager may not have as much growth potential as BN (Brookfield Corp), income-focused investors will still enjoy a good balance of income and long-term appreciation.
Brookfield Corp.
Brookfield Corp. stands out with a more diversified portfolio for investors seeking broad exposure to the firm's extensive assets. The stock’s yield, currently at 0.7%, is not as high as BAM’s, but for those focused on long-term growth, the trade-off is worthwhile. The stock has risen over 21% year to date, significantly outperforming the TSX Index.
Looking ahead, Brookfield Corp. continues to secure smart deals in the alternative asset space. With BN shares recently hitting new all-time highs (just above $63), Brookfield Corp. stock appears to be a timely investment. While it remains to be seen if we’re witnessing the start of a significant breakout, the stock is certainly intriguing at current levels.
Brookfield Asset Management
For those not focused on income, Brookfield Asset Management’s emphasis on asset management services might be more appealing. This capital-light business model could be attractive, especially for investors interested in the growing global demand for alternative cash flow-generating assets. The nearly 4% yield is a highlight, but with the stock also rising over 9% year to date, BAM is proving strong in terms of appreciation as well.
At 33.3 times forward price to earnings (P/E), BAM appears to be fairly valued. Nonetheless, I prefer BN stock over BAM due to its lower forward P/E, which is currently 18.0 times.
Although BN may have a slight advantage over BAM at present, both stocks are solid investments at today’s valuations. The Brookfield family is robust, and for those seeking the ideal mix of income and growth, a balanced investment in both BN and BAM may be the best strategy.
