-
Brookfield Corporation Class A Limited Voting Shares (BN)
-
Brookfield Asset Management Ltd. Class A Limited Voting Shares (BAM)
Q: In response to Keith's question today you listed:
BAM: 28.0x
BN: 13.5x
And yet you picked BAM stock. Why is that?
BAM: 28.0x
BN: 13.5x
And yet you picked BAM stock. Why is that?
5i Research Answer:
It is true that BN has a lower forward P/E than BAM, but the two are completely different business models. BN focuses on compounding internally by around 15% on average going forward by retaining the majority of the earnings (higher uncertainty), while BAM is a high-quality asset manager with a royalty-like revenue stream, BAM can comfortably grow its earnings by 15% going forward while paying out most as dividends (lower risk). Generally, we like BN for growth and BAM for income.