Is Brookfield Asset Management Stock a Buy Now?

Key Points

• Brookfield Asset Management shares are up 29% during the past year versus 17% for the S&P 500 index.

• The company has huge growth plans, including a goal of increasing its dividend 15% a year through at least 2029.

• If the dividend keeps rising as planned, the stock could keep rising, too.

• 10 stocks we like better than Brookfield Asset Management ›

Brookfield Asset Management (NYSE: BAM) is a large Canadian asset manager, though it is less well known than U.S. peers like Blackstone (NYSE: BX) and BlackRock (NYSE: BLK). Brookfield Asset Management is focused squarely on expanding its business and in a dramatic way. If the company's plans play out as expected, there could be more growth ahead for the stock.

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A good run for Brookfield Asset Management

During the past year, Brookfield Asset Management's stock price has risen by 29%. During the same span, the S&P 500 index (SNPINDEX: ^GSPC) gained roughly 17%. That is significant outperformance. Brookfield Asset Management also outdistanced U.S. asset management peers Blackstone and BlackRock, which were up 18% and 25%, respectively.

BAM data by YCharts

The good news today is driven by Brookfield Asset Management's results and its future growth expectations. The dividend actually sums up the whole story. The most recent dividend increase, made at the start of 2025, was 15%. That's a huge hike that could only be supported by solid business growth. The company believes it will be able to continue increasing the dividend by 15% a year through at least 2029.

Given that long-term goal, there's little reason to wonder why investors are excited by this asset management company. Usually, investors reward companies that raise their dividend with a higher stock price, which effectively keeps the dividend yield constant. So, if Brookfield Asset Management's yield is to remain around its current 3% level, there's no choice but for the stock price to rise if it increases the dividend as planned.

Notably, Blackstone's yield is 2.3% and BlackRock's yield is 1.8%. So there may be room for Brookfield Asset Management's stock price to rise even more than the dividend growth, effectively closing the yield gap between it and these two asset management peers. Or, to put that a different way, using dividend yield as a rough gauge of valuation, Brookfield Asset Management looks relatively cheap today.

What does Brookfield Asset Management have to do?

If you buy into the growth story around Brookfield Asset Management it most certainly looks like an attractive buy. That's true from a growth perspective, a dividend growth-perspective, and a growth-and-income perspective. But what should you be watching here to make sure the company is living up to the opportunity it has laid out?

The first big thing to understand is the core asset management business. Brookfield Asset Management gets paid a fee to manage money for others. The key metric is usually assets under management (AUM), but Brookfield Asset Management manages a lot of its own money, too. So in this case, the number to monitor is fee-bearing capital, which the company provides regularly. Right now, AUM is around $1 trillion while fee-bearing capital is roughly $560 billion.

That money is spread across five different investment sectors: renewable power, infrastructure, private equity, real estate, and credit. Anticipating growth in each of these sectors, Brookfield Asset Management expects to hit $1.2 trillion in fee-bearing capital by 2030. In other words, the business will double in size, which is what will support its ability to increase its dividend at such a high rate.

The three main avenues for growth are going to be a broad focus on decarbonization, deglobalization, and digitization. If you buy Brookfield Asset Management today, keep a close eye on its success in turning these large themes into a growing pile of fee-bearing assets.

Brookfield Asset Management has a long history of success

Although not nearly as well known as its U.S. peers, Brookfield Asset Management has been investing on a global scale for more than a century, largely in the infrastructure sector. There is no reason to doubt management's ability to live up to its stated goals, noting that recent results have been quite strong.

There's one caveat. For any asset manager, market valuations play a big role in its success. A bear market would likely be a material headwind and could lead to a stock price pullback. You might have to hold through that to see the long-term benefit of owning Brookfield Asset Management. But at the same time, a bear market would probably just make this already-attractive stock even more attractive, given that bear markets have always been followed by bull markets.

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Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Blackstone. The Motley Fool recommends Brookfield Asset Management. The Motley Fool has a disclosure policy.