This Alternative Asset Manager Is One of the Best Long-Term Holds in Finance

Brookfield Corporation (NYSE: BN) doesn't get the credit it deserves. The global investment firm has delivered a 19% compound annualized total return over the last 30 years, far exceeding the S&P 500's 11% annualized total return. At that rate, it would have grown a $5,000 investment into nearly $925,000.

The leading alternative investment manager believes its best days could lie ahead. That makes it one of the best financial stocks to buy and hold long-term.

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Capitalizing on multiple long-term growth catalysts

Brookfield is in the middle of a transformative growth phase, driven by multiple long-term trends. The company invests capital on behalf of shareholders and clients (through its alternative asset management business, Brookfield Asset Management) in companies and real assets that benefit from secular growth trends.

The firm sees a once-in-a-generation opportunity to build the digital backbone to support AI. Brookfield estimates that total worldwide spending on AI infrastructure will exceed $7 trillion over the next decade. It's seizing on this opportunity by launching a fund to invest up to $100 billion in AI infrastructure assets.

AI infrastructure is only one growth driver. Brookfield also sees an enormous opportunity to offer aging populations wealth products that provide retirement income (e.g., annuities and private funds). The company is also a leading global real estate investor, positioning it to capitalize on the global real estate recovery.

An extremely compelling investment opportunity

Brookfield expects its core businesses to deliver 20% annualized growth in distributable earnings per share over the next five years. Additionally, the company expects to generate $53 billion of cumulative free cash flow over the next five years. It plans to allocate the bulk of that cash to grow shareholder value, which it expects will boost its annualized earnings growth rate to 25% during that period. Given the company's focus on durable long-term growth drivers, it should continue growing its earnings at a strong rate well past 2030.

Companies growing as rapidly as Brookfield typically trade at premium valuations. However, that's not the case with this leading alternative asset manager. Brookfield currently trades at around $45 per share, well below the company's plan value of $68 per share. It expects to increase the firm's value to $140 per share by 2030 through earnings and operational growth. It's rare to see such a high-quality company trading at such a discounted valuation.

A must-own financial stock

Brookfield is a wealth-creating machine. The global investment firm expects to deliver 25% annualized earnings per share growth over the next five years, driven by multiple long-term catalysts. That puts it in a strong position to deliver robust total returns, especially from today's discounted valuation. That high return potential makes Brookfield one of the best financial stocks to buy and hold long-term right now.

Matt DiLallo has positions in Brookfield Asset Management and Brookfield Corporation and has the following options: short July 2026 $40 puts on Brookfield Corporation. The Motley Fool has positions in and recommends Brookfield, Brookfield Asset Management, and Brookfield Corporation. The Motley Fool has a disclosure policy.