In a volatile market, it makes sense to invest in solid, proven stocks that can not only provide a growing source of income but operate in a capacity that is not considerably impacted by a downturn in the economy. One such investment that should be on the radar of nearly every investor is Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM).
Let’s take a closer look at Brookfield and determine if it belongs in your portfolio.
Two minutes with Brookfield As the name suggests, Brookfield is an asset manager and a very successful one too. Brookfield is one of the largest and most successful asset managers on the planet, with a portfolio of investments that includes infrastructure, real estate, and utilities, operating in over 30 countries on six continents.
Many of the properties that Brookfield manages are some of the most well-known and sought-after real estate holdings on the planet. The company owns large segments of downtown Toronto, Sydney, and New York, is the largest corporate landlord in London, where it also owns Canary Wharf, and it owns the iconic Atlantis hotel in the Bahamas. Turning to its utility and infrastructure segments, Brookfield has amassed a sizable number of hydroelectric facilities and has interests in roads, cell phone tower networks, as well as ports.
Brookfield’s impressive and well-diversified portfolio is built on a refined business model the company has adhered to for well over a century; it acquires distressed assets at a discounted price, turns them around and flips them for a profit, or holds them until such time that the market has recovered enough to warrant a sale and profit.
One interesting point worth mentioning is Brookfield’s child companies, which helps provides some insight into how Brookfield has grown over the years and why Brookfield is a better investment than you may think.
Brookfield’s child companies include Brookfield Business Partners, Brookfield Property Partners, and Brookfield Renewable Partners. All of these child companies were spun off from the main parent company once their respective asset portfolios grew to a certain level.
This allows the hyper-focused child companies to focus on generating cash flow, while the parent company remains at arms-length ready to provide some financial investment muscle if needed. Brookfield remains invested in its subsidiary companies and therefore benefits off the success of them.
Between that well-structured and diversified portfolio of investments, Brookfield has managed to provide long-term investors with double-digit returns, and that’s not even factoring in Brookfield’s quarterly dividend.
On its own, the 1.48% yield may not seem as attractive, as there is a bevy of income-producing investments on the market at the moment, but that dividend could provide a boost to your long-term holdings over time. Again, the idea here is to buy and forget about it.
Fool contributor Demetris Afxentiou has no position in any of the stocks mentioned. The Motley Fool owns shares of Brookfield Asset Management, BROOKFIELD ASSET MANAGEMENT INC. CL.A LV, and BROOKFIELD BUSINESS PARTNERS LP. Brookfield Property Partners is a recommendation of Stock Advisor Canada. Brookfield Renewable Partners is a recommendation of Dividend Investor Canada.