Here's Why Brookfield Asset Management Stock Is a Buy Before August 1

Brookfield Asset Management (NYSE: BAM) is an attractive dividend stock with an above-market yield of 3.2%. It is an attractive growth stock, with plans to double the size of its most important business by 2030. And it is an attractive dividend growth stock because management is planning to hike the dividend by 15% a year through to the end of the decade. Don't wait until Brookfield Asset Management reports second-quarter earnings in early August to buy in.

What does Brookfield Asset Management do?

As its name implies, Brookfield Asset Management is an asset manager. That basically means it collects money from other investors and then invests that money, for a fee, on their behalf. The total fees Brookfield Asset Management charges are based on the dollar value of the assets it oversees, so the more money it manages, the more money it makes as a business.

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Right now Brookfield Asset Management has around $550 billion in fee-generating assets. That's a lot of money, for sure, but the goal is to grow that figure to $1.1 trillion by the end of the decade. Without getting too deep into the weeds, that will, roughly speaking, lead to a doubling of the company's revenues and greatly increase its earnings.

It has five platforms to grow, too, so there are multiple levers here. The list of growth opportunities includes renewable power, infrastructure, real estate, private equity, and credit. Brookfield Asset Management believes that the clean energy transition, the increasing use of technology, and the move to reshore business operations and manufacturing will all be supported by big-picture trends.

Every quarter gets Brookfield Asset Management closer to the goal

Brookfield Asset Management will interest a broad range of investors. And every set of quarterly results it reports will show its progress toward the long-term goals it has set. To be fair, no single quarter is likely to be materially more important than any other. However, every quarter that goes by is another step in the company's progress. Miss too many steps and you could miss out on a lot of the journey, including large dividend hikes and stock price increases that could result from those hikes.

At some point, Wall Street is going to catch on to the fact that Brookfield Asset Management is steadily working toward its long-term goals. And when that happens the shares could be afforded a much higher valuation, leading to a much lower dividend yield. For reference, asset manager BlackRock (NYSE: BLK) has a 2% yield and Blackstone (NYSE: BX) has a 2.8% yield.

BAM data by YCharts

Both of those U.S. asset managers are much larger companies than Brookfield Asset Management. But that may not be the case forever, assuming Brookfield Asset Management gets close to its growth goals. With an over 100-year history of success behind it, Brookfield Asset Management seems highly likely to keep executing well in the future. For long-term investors with an interest in dividend income, it probably doesn't make sense to wait for more and more good news to pile up quarter after quarter.

Don't miss the opportunity with Brookfield Asset Management

The asset management business, like all others, waxes and wanes over time. But Brookfield Asset Management has been outperforming its larger peers over the past year. And it still has a higher yield backed by what is likely to be a dividend that is growing very rapidly. Given the fact that Brookfield Asset Management's yield is still so much higher than those of its U.S. peers, acting now seems like a better option than waiting for more good news to come out when the company reports earnings.

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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.