KKR - Brookfield Asset Management: Priced To Perfection
2024-02-12 22:37:49 ET
Summary
- Brookfield Asset Management is a highly profitable asset manager with a 50% net margin and almost no debt.
- Bruce Flatt's reputation and the company's flexible corporate structure are competitive advantages for Brookfield.
- Brookfield Asset Management has shown strong profitability and growth, but its valuation is higher than its competitors and it requires continued growth to justify its stock price.
- Also, the company's structure, while an advantage for raising funds, exposes investors to the risk of misunderstanding the company and making a bad decision about its shares.
- For the reasons above I consider BAM stock a hold.
Brookfield Asset Management ( BAM )( BAM:CA ) is one of the world’s most profitable asset managers. Boasting a 50% net margin, its profitability compares favorably to competitors such as KKR ( KKR ), Apollo ( APO ) and the Carlyle Group ( CG ). Every dollar BAM earns in revenue turns into $0.45 in earnings, and every dollar of equity produces $0.20 in earnings . These are very good profitability numbers, and on top of all that, the company has almost no debt, and a 0.02 debt/common equity ratio. Shockingly good balance sheet....
Brookfield Asset Management: Priced To Perfection