Thursday, November 6, 2014

Brookfield Asset Management

On my other blog I am today writing about the presentation at the World Money Show in Toronto that was also a Natural Resources Panel.

I do not own this stock of Brookfield Asset Management (TSX-BAM, NYSE-BAM). I used to own an earlier version of this stock as Hees International, then Edper Group and then EdperBrascan back in 1987 to 1999.

Dividends are paid in US$, so they will fluctuate with the fluctuation of our currency. After 2008 growth in dividends has been quite slow. Dividends have also grown faster in US$ terms that in CDN$ terms. The dividend yield is rather low and over the longer term dividend growth is good.

The current dividend has a dividend yield of 1.32%. The 5 year median dividend yield is at 1.77% in CDN$ and 1.74% in US$. The last dividend increase was for 6.7% in US$, but only 4.1% in CDN$. The 5 and 10 year dividend growth is 0.10% and 8.42% per year in CDN$ and 2.96% and 10.56% per year in US$.

Canadian shareholders have done well in this stock recently. The 5 and 10 year total return has been at 21.63% and 13.80% per year with 2.95% and 2.67% per year from dividends and 18.68% and 11.12% per year from capital gains. The total return for US shareholders is similar.

The outstanding shares have increase by 1.5% and 0.7% per year over the past 5 and 10 years. Revenue and earnings growth has been good and cash flow growth has been moderate to good. Revenue is up by 10.1% and 20% per year over the past 5 and 10 years. Revenue per Share is up by 8.5% and 19.2% per year over the past 5 and 10 years in US$ terms. The growth is slightly less in CDN$.

EPS growth is at 25.1% and 18.32% per year over the past 5 and 10 years. Cash Flow per Share is up by 7.3% and 16.5% per year over the past 5 and 10 years. These are in US$. The growth is slightly less in CDN$.

Return on Equity has been below 10% over the past 10 years twice and over the past 5 years twice. The ROE for 2013 was at 11.9% with the 5 year median at 11.4%. The ROE on comprehensive Income is quite a bit lower in 2013 at 7.5%. The 5 year median ROE on comprehensive income is better at 10.4%. When the ROE on comprehensive income is significantly lower than the ROE on net income, it suggests that perhaps earnings are not of good quality.

The debt ratios are generally good with the Leverage and Debt/Equity Ratios are little high. The Liquidity Ratio is 2.09. The Debt Ratio is 1.73 and the Leverage and Debt/Equity Ratios are 2.37 and 1.37.

The last thing to mention is the company seems to have lots of cash on hand. At the end of 2013 cash equal 5.8% of the stock price and currently cash is at 13.1% of the stock price. Over the past 5 years cash has a median value of 10.4% of the stock price.

Sound bit for Twitter and StockTwits is: Dividend Growth stock. See my spreadsheet at bam.htm.

This is the first of two parts. The second part will be posted on Friday, November 7, 2014 and will be available here. The first part talks about the stock and the second part talks about the stock price.

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. Its web site is here Brookfield Asset Management.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

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