Brookfield: A Calculated Risk (and a Decent Dividend)

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Right. Brookfield Asset Management. BAM, if you’re keeping score. Look, I’m not usually one for shouting about dividend yields, it feels… pedestrian. But triple the S&P 500? That’s not pedestrian, that’s a little bit… aggressive. And they’re aiming for 18% annual earnings growth. Eighteen. Honestly, it feels like they’re daring you to find a flaw. Which, naturally, I’ve been doing. For a living, actually. So, if you’re the type who likes a bit of income with your growth, pay attention. This isn’t a recommendation, obviously. I just analyze things. And occasionally judge people. Internally, mostly.

They’ve Pulled This Off Before, Haven’t They?

Okay, so they want to double fee-earning capital in five years, taking it from $580 billion to $1.2 trillion. Ambitious? Yes. Completely unhinged? Possibly. But here’s the thing: they actually did double it between 2020 and 2025, going from $277 billion to the current $580 billion. That’s roughly 15% a year. Which, let’s be honest, is the kind of growth that makes most fund managers weep with envy. So, they’ve proven they can do it. Doesn’t mean they will, of course. Wall Street is a fickle beast. A bear market could throw a wrench in things. But, you know, bear markets always seem to happen eventually. It’s just a matter of when. And frankly, I’m more concerned about the champagne socialists complaining about their losses.

And it’s not like they’re putting all their eggs in one basket. They’re diversified – renewable power, infrastructure, real estate, private equity, credit. They manage money for everyone from small investors to insurance companies. It’s… comprehensive. They’re also riding these investment themes – decarbonization, deglobalization, digitization. Apparently, that adds up to a $100 trillion opportunity. Which sounds… large. I’m not a mathematician, but I suspect it’s a significant amount of money.

Five Years From Now: What Does This Look Like?

Assuming they hit these growth targets – and they have proven they can, let’s not forget – where does that leave the stock? That’s the million-dollar question, isn’t it? Or, in this case, the… considerably larger question. But let’s talk about that dividend yield. Currently, it’s a rather attractive 3.3%. They plan to use distributable earnings growth to fuel dividend growth. If they manage that 18% growth, they should be able to increase the dividend at a rate of around 15% – which is what they did in 2025. So, in five years, the dividend could double. The rule of 72 is a handy trick, apparently. I mostly use spreadsheets and a healthy dose of cynicism.

Dividend yield is simple math: dividend payment divided by stock price. Increase the dividend, keep the price steady, and the yield goes up. But here’s the kicker: steady dividend increases usually lead to steady stock price gains. Stocks tend to trade within a yield range. To maintain that 3.3% yield, the share price would need to double, too. It’s… elegant, really. If you ignore the inherent instability of the market, of course.

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Long-term investors are looking at an attractive yield backed by a growing business. That growth should lead to dividend growth and share price appreciation. It’s a solid growth and income story. Even conservative investors might find it worthwhile. Though, let’s be honest, most investors are just hoping to get rich quick. Which rarely happens.

Don’t Ignore the Inevitable Doom

The fundamental investment thesis for Brookfield is strong. But five years is a long time on Wall Street. A bear market is almost guaranteed to happen sometime between now and 2030. So, this is a five-year commitment, effectively. If you buy the stock based on these growth plans, you’re in it for the long haul. Don’t let a bear market scare you out of it, or you might miss the recovery. Though, honestly, predicting market recoveries is a fool’s errand. I should know.

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2026-01-19 13:32