With respect, why do you think so highly of BN?
MarketGrader.com (supplied through BMO) concludes the following:
1. Poor fundamentals
2. Growth = C
3. Profitability = D
4. Value = B
5. Cashflow = B
The yield at 0.8% is inconsequential .
I look forward to your comments.
Cheers
One reason is shareholder value creation. While accurate numbers are more difficult due to the number of spin offs the company has done over the year, shareholders have done very very well by the company. At least 4,000% in the past 20 years, according to Bloomberg. We are not sure why MarketGrader would give it poor fundamentals. For one, it has $140B in available capital. Earnings per share have tripled in the past eight years. Valuation is attractive at 13X earnings. Profitability can be confusing, as its earnings depend on transactions. But it has only lost money twice since 1996 (2009, 2021). Cash flow also varies with deal monetization but is generally very solid. The yield is low by design as BN is investing in growth. The company split into two not long ago, and the other company, BAM is the dividend vehicle at a 3.81% yield. We think that what is happening is that MarketGrader uses a 'black box' screening system, and does not pick up the positive nuances of companies that do not fit an exact template in their financials. We would consider BN one of the best overall companies in Canada.