Brookfield Asset Management Inc.

On my other blog I am today writing about Money Show 2015 and ETFs learn more...

Sound bite for Twitter and StockTwits is: Dividend growth RE Company. The past has been good, but analysts do not see a very good year for this company in 2015. Analysts only see is rise in Revenue, but expect Earnings and Cash Flow to decline. See my spreadsheet on Brookfield Asset Management Inc.

I do not own this stock of Brookfield Asset Management Inc. (TSX-BAM.A, NYSE-BAM). I bought this stock as Hees International in first in 1987. Between 1991 and when I sold in 1999 there was no dividend increases. The stock was going nowhere at that time, so I sold. There have been a lot of name changes and amalgamations since I had this stock.

First of all this company reports in US$ and distributes its dividend in US$. For Canadians, the distribution of dividends in US$ means that dividends are going to vary all the time as currency exchanges vary all the time.

Currently the dividends are low and the dividend growth is low to moderate. The current dividend is just 1.4% based on dividends of $0.48 and a stock price of $34.44 US and $45.81 CDN$. The 5 year median dividend yield is 1.7%. Dividends have growth over the past 5 and 10 years at the rate of 6% and 9.5% per year in CDN$. Dividends have grown over the past 5 and 10 years at the rate of 3.9% and 9.9% per year in US$. The last dividend increase was in 2015 and it was for 5.9%.

The Dividend Payout Ratios are good. The DPR for 2014 in US$ terms was 14.6% for EPS and 13.6% for CFPS. The 5 year median values are 22.3% and 14.8%. The DPR for 2015 is expected to a bit higher at 27.8% for EPS and 27% for CFPS. Earnings and Cash Flows are expected to decline in 2015.

Shareholders have done well over the past 5 and 10 years with total returns of 18.22%and 12.49% per year, respectively. The portion of this total return attributable to dividends is at 2.56% and 2.3% per year. The portion of this total return attributable to capital gains is at 15.665 and 10.19% per year.

The outstanding shares have increased by 1.6% and 0.6% per year over the past 5 and 10 years. Shares have increased due to DRIP, Stock Options and Share Issues. Shares have decreased due to Buy Backs. All my growth figures will be in US$ terms as this company reports in US$. Revenue growth is moderate to good. Earnings growth is good. Cash Flow growth is good.

Revenue has grown by 8.7% and 16.8% per year over the past 5 and 10 years. Revenue per Share has grown by 7.1% and 16.1% per year over the past 5 and 10 years. Analysts expect good growth in Revenue this year by around 7.9%. If you look at the 12 month period to the end of 2014 and the 12 month period to the end of the second quarter, Revenue has only grown at 0.6%.

EPS has grown by 45.8% and 17.9% per year over the past 5 and 10 years. Analysts expect earnings to decline by 45% in 2015. If you look at the 12 month period to the end of 2014 and the 12 month period to the end of the second quarter, EPS has only declined at 20%.

Cash Flow has grown at 12.9% and 16.5% per year over the past 5 and 10 years. Cash Flow per Share has grown at 11.2% and 15.8% per year over the past 5 and 10 years. Analysts expect Cash Flow to decline by 35% in 2015. If you look at the 12 month period to the end of 2014 and the 12 month period to the end of the second quarter, Cash Flow has only declined at 6%.

The Return on Equity has been below 10% once in the past 5 years and twice in the past 10 years. The ROE for 2014 was 15.4% and the 5 year median is 11.7%. The ROE on comprehensive income for 2014 is 16.9% and the 5 year median is 10.4%.

The company does not separate out current assets and liabilities. However, I determined a Liquidity Ratio of 2.25. The Debt Ratio is 1.70. The Leverage and Debt/Equity Ratios are 2.43 and 1.43. These ratios all look fine.

This is the first of two parts. The second part will be posted on Thursday, November 12, 2015 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. 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 here Brookfield Asset Management Inc.

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.

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