Brookfield Corporation or Brookfield Asset Management: Which One Is the Smarter Buy?

Brookfield Corporation (NYSE: BN), one of the world's largest financial holding companies, spun off its asset management services as Brookfield Asset Management (NYSE: BAM) in late 2022. The former still owns about 73% of the latter.

Brookfield Asset Management's stock has risen 53% since its first trading day, while its parent company's stock has risen 82%. Including reinvested dividends, Brookfield Asset Management delivered a total return of 72%, compared to Brookfield's total return of 86%. Let's see why Brookfield outperformed its new spin-off -- and it's still the smarter stock to buy right now.

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The differences between Brookfield and Brookfield Asset Management

Brookfield is a conglomerate that invests in real estate, transportation infrastructure, renewable energy, private equity, and credit markets. It's also in the process of absorbing its rapidly growing insurance business, Brookfield Wealth Solutions (NYSE: BNT), back into the company.

Most of Brookfield's profits come from the physical assets it owns -- such as hydroelectric dams, toll roads, and office buildings -- as well as its share of Brookfield Asset Management's profits. It invests most of that cash back into new assets, so it only pays a low forward yield of 0.6%.

Brookfield Asset Management was spun off as a "pure play" asset manager that raises the capital and manages Brookfield's actual investments. It doesn't buy or own Brookfield's hard assets; it only holds the rights to manage those properties and all of the capital pooled from its parent company and institutional investors.

Brookfield Asset Management generates most of its profits by charging management fees on all of the capital it manages, making it an asset-light alternative to Brookfield's capital-intensive business. That's why it can afford to pay a much higher forward dividend yield of 4.1%.

Why did Brookfield outperform Brookfield Asset Management?

Investors typically choose Brookfield's stock for direct exposure to its underlying assets, the appreciation of its net asset value (NAV), and the benefits of long-term compounding. Brookfield also owns nearly three-quarters of Brookfield Asset Management, so you're still getting a substantial cut of the spin-off's profits.

Those who want stable, fee-based income with less risk will generally prefer Brookfield Asset Management, but it won't benefit from the appreciation of Brookfield's underlying assets. Instead, its growth is primarily measured by its total assets under management (AUM). Simply put, it's designed to deliver more stability with less upside potential than Brookfield.

Brookfield Corporation struggled with soaring interest rates in 2022 and 2023, which made it more expensive to purchase new assets. But after the Fed cut its benchmark rates six consecutive times in 2024 and 2025, its real estate, infrastructure, and green energy businesses warmed up again. Its stake in Brookfield Wealth Solutions, which was competely separate from Brookfield Asset Management, also became a major growth engine.

Brookfield Asset Management remained a stable investment that attracted more income-seeking investors as interest rates fell. Still, its rising AUM couldn't keep pace with the rising NAV of Brookfield Corporation's underlying assets.

Will Brookfield continue to deliver bigger returns?

Brookfield is usually valued by its distributable earnings (DE) per share (before realizations), which reflect the "true" cash generated by its core business, rather than its earnings per share (EPS). That figure rose 11% in 2025, and analysts anticipate 19%-23% growth in 2026. At $46, it still looks cheap at 17 times this year's midpoint estimate.

Brookfield Asset Management is valued by its fee-related earnings (FRE) per share, or the recurring fees that fund its dividends. That figure grew 22% in 2025, and analysts expect 14%-17% growth in 2026. At $49, it trades at 23 times the midpoint of that estimate. That range ($2.10-$2.15) should also easily cover its forward dividend rate of $2.01 per share.

Both of these stocks look healthy, but they'll continue to attract different types of investors. As long as interest rates don't abruptly skyrocket, Brookfield should continue to outperform Brookfield Asset Management this year as its business grows at a faster rate. Brookfield also looks cheaper relative to its near-term growth potential, so it's still the smarter buy right now.

Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Brookfield Asset Management, Brookfield Corporation, and Brookfield Wealth Solutions. The Motley Fool has a disclosure policy.