Friday, October 16, 2009

Brookfield Asset Management

I am reviewing this stock (TSX-BAM.A) today as I last reviewed it on my blog in November 2008 and since I have updated my spreadsheet with the December 2008 financials. I have also updated my spreadsheet with the 2nd quarterly financials. I do not own this stock. This company is on the dividend list of Dividend Achievers . (Note the new address for Dividend Achievers list.)

I follow this stock because it is on the Dividend Achievers list, but it is real estate and currently I am happy with the real estate stock I own. This means that I have no current plans in buying this stock. But I do follow the ones on the dividend lists, as you may never know what I may want to do in the future. One problem with this stock is that it declares dividends in US dollars, so the actual dividends that you receive in Canada can fluctuate with currency changes. It also reports in US dollars.

When I look at this stock, I most of the growth figures are good for the last 5 years, but not great for the last 10 years. For example, if you look at earnings, they have grown about 10.9% per year for the last 5 years, but only 7.3% per year for the last 10 years. If you look at the cash flow, you see the same thing. The cash flow for the last 5 years has grown about 9% per year. The cash flow for the last 10 years has only grown about 3.5% per year. This is because the stock did not do particularly well from 1998 to 2002.

Dividends have increase well as the growth in dividends over the last 5 years was almost 18% per year and for the last 10 years was almost 8% per year. However, this is due to the big increases in dividends that occurred in 2006 and 2008. Most years the dividends did not increase by much. The Payout ratios have varied quite a bit over the years. As I mentioned before, dividends are now declared in US dollars, so they can fluctuate because of the Canadian/US currency exchange rates.

The Asset/Liability ratios on this stock at 1.10 at the end of 2008 and the 5 year average at 1.16 are low. I like to see them at, at least 1.50. However, with the ratios being above 1.00, it means that the assets can cover the liabilities.

As I said above, I follow this stock as it is on the Canadian Dividend Achievers list. I do not have any. On Monday, I will look at what the analysts are saying. However, I have noticed in updating my spreadsheet that expected earnings for 2009 and 2010 have been lowered since I last looked at this stock in May 2009. This is not a good sign.

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. Partners Ltd owns 17%. 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.

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