Here's My Top Long-Term Compounder to Buy Right Now

When I think about stocks I'd be comfortable holding for decades, Brookfield Corporation (NYSE:BN) is at the top of my list. The company owns and operates infrastructure, renewable energy, real estate, and other hard assets worldwide, and it controls one of the largest alternative asset managers. It has delivered annualized returns of more than 15% to shareholders for over 30 years.

Even so, Brookfield's stock trades for about $42, roughly 15% below its 52-week high of $49.57. I've owned Brookfield for several years, and its third-quarter report on Nov. 12 gave me another reason to keep adding to my position. In fact, I'd go so far as to call Brookfield my favorite long-term compounder to buy right now.

Image source: Getty Images.

Earnings are growing at a double-digit pace

Brookfield's main profit measure is distributable earnings (DE), which refers to the cash its businesses generate that it can use for dividends, buybacks, or new investments. In the third quarter, Brookfield's total DE posted a 16% per-share increase from a year earlier. Excluding gains from selling assets, DE grew 14% per share.

All three of Brookfield's main businesses contributed. DE from asset management rose 10%. Brookfield Wealth Solutions, its insurance arm, grew DE by 22%. And its operating businesses, which include infrastructure, renewable energy and real estate, earned $467 million, up 28% from $366 million a year ago.

Putting its cash to work

Brookfield is using a big chunk of its cash to buy back its own stock. It repurchased more than $300 million in shares since its last earnings report, bringing its 2026 total to $889 million. The company also sold about $20 billion of assets in the quarter, and it has $207 billion of capital available to deploy across its businesses.

An insurance engine that keeps growing

Brookfield's Wealth Solutions segment sells annuities and other insurance products, then invests the premiums it collects, much like Berkshire Hathaway (NYSE: BRKB) does with its insurance float. It originated $4 billion of annuity sales in the quarter, and its insurance assets are now close to $200 billion. Management has said it wants to nearly double insurance assets to $350 billion within five years, so this part of the business could continue to grow for many years.

The asset manager inside Brookfield

No discussion of Brookfield's results would be complete without taking a look at the latest results from Brookfield Asset Management (NYSE:BAM), the alternative asset manager it spun off as a separate public company in 2022. Brookfield Corporation still owns about three-quarters of Brookfield Asset Management, so its growth (and its dividend) flows directly to BN shareholders.

Brookfield Asset Management's own third-quarter results were strong. Fee-related earnings, which are the steady management fees it collects from the funds it runs, grew by 15%. Brookfield Asset Management raised $25 billion of new capital in the quarter and $123 billion so far this year, and its fee-bearing capital grew 13% to $682 billion.

It's also building a large AI infrastructure business. Its AI infrastructure fund and infrastructure debt strategy attracted $10 billion of commitments over the past year, and Brookfield Asset Management agreed to invest up to $9 billion in AI computing infrastructure in South Korea with NAVER and Nvidia (NASDAQ:NVDA).

Brookfield Corporation also benefits from carried interest, which is the share of investment profits that funds pay their manager. It realized $222 million in carried interest in the third quarter, and it has $13 billion in unrealized carried interest that could be realized over time.

To be sure, investors seeking income may prefer to own Brookfield Asset Management directly. It offers a quarterly dividend yield of about 3.9% at the current stock price. But I prefer Brookfield Corporation for long-term compound growth, because it gets BAM's earnings plus its insurance and operating businesses, and it reinvests most of what it earns.

Is Brookfield a buy?

At about $42 per share, Brookfield trades at roughly 17 times its trailing 12-month DE before realizations. Management has set a goal of growing DE by 25% a year over five years, and if it gets anywhere close, that valuation looks incredibly attractive to me.

To be sure, Brookfield isn't a simple business to analyze. Its financial statements are complex; it uses a lot of debt at the asset level; and its growth depends on raising new capital and selling assets at good prices. Higher interest rates could make both harder. On the other hand, Brookfield's corporate debt has an average term of 14 years, and nothing comes due for the rest of 2026.

Having said all that, Brookfield has everything I look for in a long-term compounder. Its earnings are growing at a double-digit rate; it's buying back stock, building a portfolio of AI-related assets, and its asset management and insurance businesses give it two growth engines that should feed each other for years. I own it, and I plan to keep adding to my position.

Matt Frankel, CFP® has positions in Berkshire Hathaway, Brookfield Asset Management, and Brookfield Corporation. The Motley Fool has positions in and recommends Berkshire Hathaway, Brookfield Asset Management, Brookfield Corporation, and Nvidia. The Motley Fool has a disclosure policy.