Thursday, November 27, 2008

Brookfield Asset Management

Brookfield Asset Management is on Mike Higgs’ list at Both Brookfield Properties and Brookfield Asset Management (TSX-BAM.A) are on the Dividend Achievers list at Brookfield Properties (TSX-BPO) is on the Dividend Aristocrats list at (see indices). Note that this Brookfield Properties is own 51% by Brookfield Asset Management Company.

This company seems to be a much better one than Brookfield Properties. There is the same problem with valuing this company as with Brookfield Properties, as the Financial Statement switched from reporting in CDN$ to US$. An added problem with this company is that no one had the company’s TSX stock prices prior to part way through 2004 and I had to use the US$ stock prices from the NYSE.

Even though the dividends are not growing as strongly as for Brookfield Properties, I think that this is a safer stock. I like the growth in Revenues and Cash Flow. If you cannot grow Revenues, you will not grow Cash Flow or Earnings per Share (EPS). The EPS for the last 10 years is not great, but they have done much better for the 5 year period. The 5 and 10 years to the last annual statement has seen the Revenue grow by 14% and 18% per year respectively, the Closing Price grow by 13% and 18% per year, respectively, the Cash Flow grow by 44% and 23% per year, respectively, the book value by 9% and 4% per year, respectively, and the EPS for the last 5 and 10 years have grown by 66% and 2% per year respectively.

What I find negative about this stock is that at the last Annual Statement of 2007, the Graham price was quite a bit below the Closing Price, the P/E ratio was 28, which is quite high and the Accrual Ratio was very high at 8.8%. The Asset/Liability Ratio is lower than what I would like at 1.17 and the growth in book value, as shown above, is not great.

I will take another look at this stock tomorrow to see what analyst have to say about it and also, how well this stock has done since the 2007 Annual Report.

This Canadian Asset Managing company invests in and operates a variety of assets on its own behalf as well as co-investors. It is focused on property, power and infrastructure assets. It operates in Canada, US and internationally. The subsidiaries of the Company are Brookfield Homes Corporation, Brookfield Properties Corporation, BPO Properties Limited, Multiplex, Brookfield Power Inc., Great Lakes Hydro Income Fund, Brascan Brasil, S.A., Brascan Residential Properties, S.A. and Brookfield Investments Corporation. Its web site is See my spreadsheet at

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at for a list of the stocks for which I have put up spreadsheets on my web site.

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