Here’s 1 Solid Company to Put in Your Canadian Dividend Portfolio Today

Brookfield Asset Management Inc. (TSX:BAM.A)(NYSE:BAM) has a proven track record and gives investors global diversification and a growing dividend. The company has a strong focus on investing in long term, real assets such as infrastructure and real estate.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

If you’re looking to build a diversified dividend portfolio, you’re going to want to include companies that are diversified across geographies and industries and have solid track records of operational excellence. In Canada, there are a number of companies that fulfill all of these criteria.

One company that ticks all of these boxes is Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM). These shares represent a position in the parent holding company of a large number of subsidiaries. These subsidiaries operate all over the world in a variety of industries. Some sectors include the renewable energy, office properties, infrastructure, financial services, and many more. This holding company is basically a one-stop shop for portfolio diversification.

As an asset manager with a focus on the long term, one of the benchmarks Brookfield uses to judge its performance is its ability to compound the growth of its book value and funds from operations (FFO) over time. The company has been impressive at doing this, compounding book value by 12% and FFO by 16% annually over the past two decades.

Its results from this year are no exception. In Q2 2018, Brookfield grew its FFO by 34%, providing a solid base for regular dividend payments. Revenues increased by over 40% year over year in part attributed to revenues brought in from completed acquisitions and improved pricing at its graphite electrode manufacturing business. Brookfield maintains that a large part of its returns has been due to a focus on real assets, such as real estate. The company also pays a dividend of 1.37%, which it has increased regularly for several years.

If this company is so diversified across sectors and geographies, then why don’t I simply own an index ETF and be done with it? Why take the company-specific risk? Well, the biggest reason would be the fact that an index owns many different companies, even those you do not wish to own.

When you buy shares of Brookfield, you are buying its expertise at finding deals and executing those businesses effectively, instead of just owning everything. Consider that passive investing in a major index like the S&P 500 has produced a compound annual growth rate (CAGR) of 7% annually over the past 20 years. This is a pretty good rate of return. But when compared with Brookfield’s CAGR of 16% over the same time period, you can see that its strategy has paid off over the long term.

Apart from the above critique, potential investors should note that the company has a lot of debt. Having a large amount of debt is not uncommon though for companies operating in the real estate, utility, or infrastructure sectors. This is mostly due to the fact that these are long-term investments with steady, somewhat predictable cash flows. Since Brookfield is involved in all three sectors, it stands to reason that it would carry a fair amount of debt.

Brookfield has an excellent track record, a fantastic distribution, and tonnes of diversification. Its ability to capitalize on opportunities has been proven over the years. This is a steady company, but not a fast grower. If you are interested in owning a solid company that will pay you steadily growing dividends over time and are confident in the future of real estate, this is a stock you should seriously consider owning in your defensive portfolio.

Should you invest $1,000 in Brookfield Asset Management right now?

Before you buy stock in Brookfield Asset Management, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Brookfield Asset Management wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Kris Knutson has no position in any of the stocks mentioned. The Motley Fool owns shares of BROOKFIELD ASSET MANAGEMENT INC. CL.A LV.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

Beware of bad investing advice.
Dividend Stocks

Where I’D Invest $1,000 in 3 No-Brainer Canadian Stocks Under $150

Want to invest $1,000 in some great stocks? Here's a trio that investors can buy at a discount right now…

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

The 1 Canadian Stock I’d Buy and Hold Forever in a TFSA

This Canadian stock is a strong option for any TFSA, and here's why.

Read more »

Man holds Canadian dollars in differing amounts
Dividend Stocks

Invest $25,000 in These Dividend Stocks for $1,267 in Annual Passive Income

Dividend stocks are strong options, but these two could be some of the best long-term options.

Read more »

investor looks at volatility chart
Dividend Stocks

I’m Adding This 12% Dividend Stock for a Recession-Resistant Portfolio

Despite boasting such a high dividend yield, this 12% dividend yield stock might be an excellent pick to build your…

Read more »

Make a choice, path to success, sign
Dividend Stocks

1 Undervalued TSX Stock Down 51% to Buy and Hold

This TSX stock plunged, but don't count it out, especially at these prices.

Read more »

dividends can compound over time
Dividend Stocks

How I’d Invest $50,000 of TFSA Cash in 2025

If you have $50,000 to invest in a TFSA, here's how to get started.

Read more »

analyze data
Dividend Stocks

Why I’d Focus on Canadian Value Stocks for My Long-Term Portfolio

Canadian value stocks often provide income and growth that makes them great for long-term investing.

Read more »

woman looks at iPhone
Dividend Stocks

Investing $7,000 in Your TFSA? Consider These 2 Canadian ETFs for Retirement Planning

These two Canadian ETFs can be excellent long-term investments to add to your TFSA if you have contribution room available.

Read more »