I own over 100 stocks. I like to have a well-diversified portfolio. I also often take a basket approach to investing in a specific theme rather than attempting to uncover the one company that will deliver the best returns in a given trend.
However, if I could only buy and hold a single stock, it would be Brookfield Corporation(NYSE: BN). The global investment manager sits at the intersection of several of my highest conviction investment themes. That puts it in a strong position to produce robust returns in the coming years.
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Brookfield Corporation is one of the world’s leading global investment firms. It has three distinct businesses, each of which will benefit from strong growth drivers in the coming years:
Operating businesses: The company has a portfolio built around four operating businesses. It has a 26% interest in Brookfield Infrastructure, a 46% stake in Brookfield Renewable, a 68% interest in Brookfield Business, and owns 100% of Brookfield Property.
The company is at the forefront of several global investment megatrends. Its businesses are capitalizing on AI infrastructure, decarbonization, increased investor allocations to alternatives, the expansion of private credit, and the commercial real estate recovery.These catalysts position Brookfield Corporation to grow its earnings significantly in the coming years, supporting its long-term target of delivering total annualized returns above 15% for its shareholders.
Brookfield believes AI could become the most impactful general-purpose technology in history. To reach its full potential, the world will need to invest in building out the necessary physical infrastructure to support its adoption, including data centers and clean power production capacity. The company estimates that total spending on AI-related infrastructure will exceed $1 trillion this decade and $7 trillion over the next 10 years.
The company’s ecosystem will create a virtuous cycle as it takes a multi-faceted approach to capitalize on this massive investment opportunity. Late last year, Brookfield Asset Management launched its inaugural Brookfield Artificial Intelligence Infrastructure Fund, anchored by an investment from Brookfield Corporation. The fund aims to acquire up to $100 billion of AI infrastructure assets. The first seed investments in the fund included the launch of the Brookfield-owned cloud services company Radiant and up to $5 billion in advanced fuel cells developed by Bloom Energy. Its affiliate, Brookfield Infrastructure, is investing up to $140 million into one of those fuel cell projects. That entity is also investing in building out several global data centers and in two U.S. semiconductorfabrication facilities. Meanwhile, Brookfield Renewable is investing heavily to build out additional renewable energy capacity to support AI data center demand.
AI infrastructure is one of the many trends Brookfield Corporation has positioned its business to capitalize on in the coming years. Another massive trend is the rise in individuals seeking alternative investments. They hold $40 trillion in wealth, which is nearly double the size of the institutional investor capital pool ($22 trillion). Brookfield created its wealth solutions platform to provide individuals with solutions such as annuities. Additionally, Brookfield Asset Management is developing investment products designed to meet the needs of individual investors.
Add in other growth drivers such as the recovery of commercial real estate and the expansion of private credit, and Brookfield believes its core businesses will grow its distributable earnings at a 20% annualized rate over the next five years. Meanwhile, Brookfield Corporation’s three businesses generate robust and growing free cash flow, providing it with additional capital to allocate in creating value for its shareholders. The company believes its capital allocation strategy, which including share buybacks, fund investments, and acquisitions, will add another 5% to its annual earnings-per-share growth rate over the next five years, boosting the total to 25% annualized. That drives Brookfield’s view that its stock will be worth at least $140 a share by 2030.
Brookfield Corporation has a long history of growing shareholder value. It has delivered a 19% annualized total return over the last three decades, crushing the S&P 500‘s 11% annualized return. It’s in a strong position to deliver similar, if not better, returns over the next five-plus years. That high return potential, driven by its exposure to so many of my highest-conviction investment themes, is why I’d buy Brookfield’s stock if it were the only one I could invest in right now.
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Matt DiLallo has positions in Brookfield Asset Management, Brookfield Corporation, Brookfield Infrastructure, Brookfield Infrastructure Partners, Brookfield Renewable, and Brookfield Renewable Partners. The Motley Fool has positions in and recommends Bloom Energy, Brookfield, Brookfield Asset Management, Brookfield Corporation, and Brookfield Wealth Solutions. The Motley Fool recommends Brookfield Infrastructure Partners, Brookfield Renewable, and Brookfield Renewable Partners. The Motley Fool has a disclosure policy.
Van ECK Associates Corp lowered its holdings in Brookfield Renewable Co. (NYSE:BEPC – Get Rating) by 2.6% during the 3rd quarter, according to its most recent 13F filing with the Securities and Exchange Commission (SEC). The fund owned 148,259 shares of the company’s stock after selling 3,996 shares during the period. Van ECK Associates Corp owned about 0.09% of Brookfield Renewable worth $4,841,000 at the end of the most recent reporting period.
Other hedge funds also recently made changes to their positions in the company. Colony Group LLC grew its stake in shares of Brookfield Renewable by 0.3% in the 2nd quarter. Colony Group LLC now owns 165,308 shares of the company’s stock worth $5,887,000 after purchasing an additional 523 shares during the last quarter. Bank of Montreal Can increased its position in shares of Brookfield Renewable by 24.9% in the second quarter. Bank of Montreal Can now owns 935,475 shares of the company’s stock worth $34,965,000 after acquiring an additional 186,352 shares in the last quarter. USS Investment Management Ltd increased its position in shares of Brookfield Renewable by 174.6% in the second quarter. USS Investment Management Ltd now owns 31,655 shares of the company’s stock worth $1,127,000 after acquiring an additional 20,126 shares in the last quarter. Fort Sheridan Advisors LLC increased its position in shares of Brookfield Renewable by 28.4% in the second quarter. Fort Sheridan Advisors LLC now owns 6,992 shares of the company’s stock worth $249,000 after acquiring an additional 1,546 shares in the last quarter. Finally, NewEdge Wealth LLC purchased a new position in shares of Brookfield Renewable in the second quarter worth approximately $203,000. Institutional investors and hedge funds own 68.12% of the company’s stock.
Brookfield Renewable Stock Performance
Brookfield Renewable stock opened at $29.48 on Thursday. The firm’s 50 day simple moving average is $30.46 and its 200-day simple moving average is $34.36. The company has a market cap of $5.08 billion, a P/E ratio of -52.64 and a beta of 0.95. The company has a debt-to-equity ratio of 0.89, a current ratio of 0.33 and a quick ratio of 0.33. Brookfield Renewable Co. has a fifty-two week low of $27.19 and a fifty-two week high of $44.41.
Brookfield Renewable (NYSE:BEPC – Get Rating) last released its earnings results on Friday, November 4th. The company reported ($0.25) earnings per share for the quarter, missing the consensus estimate of ($0.11) by ($0.14). The firm had revenue of $1.11 billion for the quarter, compared to analyst estimates of $1.02 billion. As a group, equities research analysts predict that Brookfield Renewable Co. will post -0.48 EPS for the current year.
Brookfield Renewable Dividend Announcement
The business also recently declared a quarterly dividend, which was paid on Friday, December 30th. Investors of record on Wednesday, November 30th were issued a dividend of $0.32 per share. This represents a $1.28 annualized dividend and a dividend yield of 4.34%. The ex-dividend date was Tuesday, November 29th. Brookfield Renewable’s dividend payout ratio is currently -228.57%.
Wall Street Analyst Weigh In
Separately, Wells Fargo & Company dropped their target price on shares of Brookfield Renewable from $41.00 to $37.00 and set an “overweight” rating on the stock in a research report on Monday, November 7th.
Brookfield Renewable Corporation owns and operates a portfolio of renewable energy power generating facilities primarily in the United States, Europe, Colombia, and Brazil. It operates hydroelectric, wind, and solar power plants with an installed capacity of approximately 12,723 megawatts. The company was incorporated in 2019 and is headquartered in New York, New York.
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