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Brookfield just reported its earnings
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and I'm sure you all know by now that
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this is the largest stock in my
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portfolio. It is also having a nice
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green day after it reported its
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earnings. And today I want to go through
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the numbers and share what my thoughts
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are on the stock now. But first I want
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to reh highlight what Brookfield's
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business is and what they actually do as
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I think many people don't even know. To
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put it as simply as possible, Brookfield
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owns, operates, and builds the backbone
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of the global economy. For example, in
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their renewables business, they are
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building one of the largest hydrogen
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projects in Canada. They own
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Westinghouse, which is considered to be
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one of the best nuclear companies in the
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world. They own hydro dams, which power
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millions of homes across North America.
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They also have solar, wind, and many
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other renewable energy assets that the
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economy relies on. They also own
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railroads, data centers in Latin
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America. They connect homes in the UK to
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the energy grid, operate energy
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infrastructure across Canada, and
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recently they purchased Colonial
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Pipeline, which is America's largest
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pipeline by volume. It delivers more
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than 100 million gallons of fuel every
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single day. Over 50 million Americans,
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45 military installations, 28
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refineries, eight airports, and four
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terminals rely on this pipeline daily.
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They have so many more assets, too. But
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this shows you the type of assets that
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Brookfield owns and operates. When they
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say they build the backbone of the
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global economy, they mean it. These
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assets are absolutely critical to the
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economy and will continue to produce
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cash flows through all economic
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environments for decades to come.
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Additionally, Brookfield is a
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world-renowned capital allocator and
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manager with over $1 trillion in assets
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under management now. Hedge funds,
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sovereign wealth funds, and high netw
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worth individuals give Brookfield money
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to allocate and invest for them.
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Brookfield's reputation, size, and track
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record give it extremely unique
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investment opportunities, too. For
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example, Brookfield has deals with
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governments and some of the best
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companies in the world. Last year, they
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signed a 10.5 gawatt power deal with
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Microsoft, which was the single largest
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corporate power purchase agreement ever
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by a factor of 8x. Intel also signed a
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$30 billion financing deal with
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Brookfield to finance the buildout of
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its chip factories in Arizona.
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Brookfield was chosen by France to lead
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a 20 billion euro deal to build out
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France's data centers, which also makes
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Brookfield one of Europe's largest data
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centers developers. Now, when SoftBank
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announced its investments into the
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United States economy and Stargate, it
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reached out to Brookfield to be one of
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the companies to help finance all of
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these investments. So, you can clearly
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see that world-renowned organizations of
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the highest quality work with Brookfield
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and governments choose the company as a
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partner to build out their
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infrastructure. And think about it, if
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you're an investor, hedge fund, or
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sovereign wealth fund with billions of
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dollars of dry capital that you want to
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invest, then you probably want to give
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it to a business like Brookfield that
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has these unique relationships and a
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track record of absolutely incredible
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execution. These relationships,
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reputation, and historical track record
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are Brookfield's moat, and this is how
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they continue to attract hundreds of
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billions of dollars of capital and
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invested wisely. So, now let's get into
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the earnings results from the business.
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And as always, I took screenshots of all
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of the highlights that I found. So,
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right here, we can see that Brookfield
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Corporation reports a 27% increase in
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distributable earnings to 1.5 billion.
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They also repurchased $850 million worth
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of shares so far year-to- date in 2025
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and their deployable capital increased
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to a record of
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$165 billion now. So, right at face
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value, just by reading the headlines, we
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can see that this was a pretty strong
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earnings report. But further on, the
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president of Brookfield Corporation
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said, "Our business performed well in
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the first quarter with earnings 30%
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higher than the prior year, supported by
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continued momentum across our core
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operations. Our asset management
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business had strong inflows of $25
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billion during the first quarter. Our
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operating businesses continue to
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generate resilient cash flows and our
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wealth solutions business delivered
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robust growth. In spite of increased
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market volatility, the outlook for our
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business continues to be strong and our
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focus remains unchanged to deliver 15%
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plus returns to our shareholders over
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the long term. Then down here in this
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table, we can see that distributable
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earnings before realizations were $1.3
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billion and DE before realizations
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increased by about 30% year-over-year.
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Now, distributable earnings on a total
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basis, which does include a realized
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gains from investments was 1.55 billion,
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which was up 27% year-over-year. So,
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Brookfield's distributable earnings
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growth is accelerating, which is exactly
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what the company said would happen. If
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you have been watching my channel for
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some time, then you know that Brookfield
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Corporation put out their investor
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presentation in in September of 2024 and
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they projected 21 to 25% annual
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distributable earnings growth. Well, in
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the first quarter, they just beat that
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and they saw growth of 27%. So, yeah,
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once again, their earnings is actually
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accelerating right now, which is good to
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see. So now let's move on to the next
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screenshot. And the underlined segments
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here is from the asset management
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business and it says fee related
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earnings were a record of $698 million
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representing growth of 26% compared to
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the prior year quarter. This was driven
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by a 20% increase in fee bearing capital
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over the last 12 months to $549 billion.
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And once again, total inflows are $25
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billion in the first quarter. We closed
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our flagship opportunistic credit fund
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strategy at $16 billion. We are set to
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have by far our largest pool of capital
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for opportunistic real estate to date.
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So while the macro is a little bit
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uncertain, it seems like Brookfield
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doesn't really care and they're
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continuing to set records across their
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business, even for capital raising. And
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what's interesting to me is they just
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raised their largest real estate fund
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ever in the company history. And this is
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interesting to me because investors in
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general haven't been too bullish on real
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estate over the past little while, but
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it doesn't really seem like Brookfield's
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clients and their customers really care.
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And they they still raised a massive new
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fund. Now, moving on to their wealth
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solutions business. This says
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distributable operating earnings were
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$430 million in the quarter and $1.5
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billion over the last 12 months. So, the
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wealth solutions business or the
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insurance business is continuing to grow
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extremely well as we're going to
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continue seeing here. But this next
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screenshot is on the operating
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businesses and it says distributable
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earnings were 426 million in the quarter
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and 1.7 billion over the past year. Our
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core real estate portfolio continues to
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grow its same store net operating
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income, delivering a 3% increase over
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the prior year. In our North American
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residential business, we generated
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approximately $640 million of proceeds
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from the sale of the master plan
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communities as we execute on our plan to
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shift the business to a more
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capital-like model. Now, I shared this
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in my recent Brookfield videos, but
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their company is actually planning on
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selling off a lot of its real estate
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over the next 5 years. It kind of has
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this what they call transitional real
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estate portfolio where they build
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residential communities and maybe buy
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some distressed real estate and then fix
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it up and try and flip it. But it's a
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very capital inensive business. And
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overall, they're just not really wanting
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to be in this business anymore. So,
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they're actually projecting to sell off
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their entire transitional development
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real estate portfolio over the next 5
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years, and they're continuing to execute
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on that plan. You may also see some
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bears point out that Brookfield's
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property group's net operating income as
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a whole is declining, but that's partly
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because they're selling off their
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portfolio. And since they have less
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assets, the only natural course is that
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their net operating income from that
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segment of the business is going to go
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down. And I don't really see this as a
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problem personally because they're
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rotating that capital into higher return
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investments. And it's it's clearly
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paying off because the earnings are
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growing substantially. But let's move on
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to the monetization activity where they
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say during the quarter we successfully
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closed approximately $22 billion of
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asset sales across the business.
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Substantially all sales were completed
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at prices in line or above carrying
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values. Now, the reason that this is
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important and I underlined it is because
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as a Brookfield shareholder, I have seen
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so many articles come out over the past
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3 years during my time holding the stock
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that the company is overinflating its
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assets on the balance sheet. But
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whenever Brookfield actually sells those
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assets, they get the value that they
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quote them at on the balance sheet, if
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not higher. So, I think the bearer
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thesis or theory that Brookfield is
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inflating its assets on the balance
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sheet is just false. And they continue
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to prove this correct. Continuing on,
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they said total accumulated unrealized
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carried interest was 11.6 billion,
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representing an increase of 14%. As we
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execute on our monetization pipeline, we
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expect to realize much of this into
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income over the next 5 years. So,
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unrealized carried interest is
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essentially unrealized gains on
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investments. And these unrealized gains
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are now sitting at 11.6 billion, up 14%
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year-over-year. And over the next five
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years, Brookfield is expecting to sell
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off these investments and realize that
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11.6 billion of earnings. This is also
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the realized carried interest figure
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that we see on their financial
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statements and in their reports. The
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realized carried figure is them selling
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off their assets. And again, they have
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that 11.6 billion of current unrealized
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gains. And over time they're going to
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realize those and that is what is
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volatile in the earnings reports. But
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let's move on to the next screenshot
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now. And here we can see that the asset
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management business delivered $684
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million of earnings in the quarter. And
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the wealth solutions business generated
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$430 million. This is up from $273
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million last year, which is growth of
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58% year-over-year. So the wealth
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solutions business over at Brookfield is
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absolutely exploding. They're doing an
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incredible job growing this business.
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And as we're going to see later on in
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the video, by 2029, Brookfield is
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expecting this business to generate
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almost $5 billion in annual earnings,
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which is about how much the entire
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company generates today. So within the
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next 5 years, they're basically
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expecting just the wealth solutions
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business to double the company's entire
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earnings. That's how much growth is left
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in this business and how much growth
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they are expecting from it over the
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short term. And it is great to see that
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this business is continuing to grow by
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roughly 60% year-over-year. It's
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actually becoming one of the largest
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earnings contributors to the entire
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company. Now, the next underlying
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segment here is the Brookfield Property
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Group because distributable earnings
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from Brookfield Property Group came in
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at $215 billion and increased by roughly
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30% year-over-year. In total, the
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operating businesses generated $426
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million of earnings and Brookfield as a
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whole generated distributable earnings
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before realizations of that 1.3 billion,
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up 30%. Then we can see that they had
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realized carried interest of about 190
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million, which increased total earnings
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on the quarter to about 1.55 billion and
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is up 27% year-over-year. This is all
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fantastic to see. Moving on to the next
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screenshot. What I like to do every
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quarter is just show Brookfield's
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distributable earnings before
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realizations. And I outline these boxes
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with a red outline because this is how
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much operating earnings Brookfield's
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business generates. The realized carried
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interest the light blue boxes that you
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see on top are them realizing gains on
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investments. And that's just a much more
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volatile figure. So to put it simply,
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the red boxes here are the company's
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actual operating earnings. And what we
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can see is that they are very clearly
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growing in 2025. Now, in the trailing 12
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months, they're sitting at $5.2 billion.
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And in the trailing 12 months, that's
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$326 per share. So that's how much
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earnings the business is generating. And
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this number is projected to continue
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growing by over 20% over the next 5
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years. Moving on to the next screenshot.
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This one is the infamous confusing table
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of all of Brookfield's different assets.
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But right away, we can see that
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Brookfield Corporation's ownership of
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BAM is now sitting at about $57 billion
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as of the end of the quarter. And these
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shares are publicly traded, by the way.
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So, if you go to the BAM ticker on Yahoo
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Finance or on Stock Unlock or anywhere,
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Brookfield Corporation owns about 1.2
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billion shares of that business in the
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public market. So, this value right
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here, you can calculate at any time. And
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at the end of the quarter, it was
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sitting at almost $57 billion. Then we
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have accumulated unrealized carried
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interest of about 7 billion after paying
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taxes and all the fees. Direct
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investments of about 11.4 billion. The
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insurance business is now valued at
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around 25 billion. All of the operating
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businesses are valued at around 41.5
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billion. Brookfield has corporate debt
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of about 19 billion which gives the
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company a net capital value or net asset
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value of around $150 billion today. On a
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per share basis, this is $94 US per
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share. And this is what the company
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believes its net asset value or
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intrinsic value is is that $94 US per
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share. I believe this is still about 60
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to 70% above where the stock is
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currently trading. And this is why
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Brookfield is continuing to buy back its
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shares because it does believe that its
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stock is undervalued. And I do agree.
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Now, I personally don't love to take a
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look at the net asset value of the
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business and value it that way. What I
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like to do is take a look at its price
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to cash flows or price to distributable
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earnings and also the company's
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expectations for future earnings growth.
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And later on in this video, we will take
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a look at those metrics. But now, let's
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move on to the highlights from the
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shareholder letter, which is written by
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Bruce Flatt. And there is so much gold
00:14:07
in this shareholder letter. It was nine
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pages long. I only have a couple of
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snippets from it, but I would recommend
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that everyone go and read it. Even if
00:14:14
you're not an investor in Brookfield
00:14:16
because it's always a master class on
00:14:18
investing, thinking long-term, zooming
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out, and not getting so caught up in the
00:14:22
day-to-day volatility and noise of the
00:14:24
markets. So, let's take a look at what
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Bruce had to write this time. While the
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geopolitical environment is more
00:14:29
uncertain than 3 months ago, our focus
00:14:31
remains the same. find great businesses
00:14:33
to acquire, buy them when we can acquire
00:14:35
for value, and operate them well once we
00:14:38
own them. History has proven through all
00:14:40
economic conditions that owning great
00:14:42
businesses for long periods of time is
00:14:44
the cornerstone of wealth creation. And
00:14:47
typical Charlie Munger fashion, I have
00:14:49
nothing to add. Moving on to the next
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screenshot. Global markets were
00:14:52
volatile, our business strong. We
00:14:54
started the year with positive economic
00:14:56
momentum. To date, growth and labor
00:14:58
market data have remained resilient, but
00:15:01
changes in US trade policy have created
00:15:03
uncertainty and capital markets. While
00:15:05
our businesses and operations are not
00:15:07
immune, they are generally insulated
00:15:09
from the current environment. This is
00:15:11
because our business focuses on
00:15:13
providing essential products and
00:15:14
services which do not rely on crossber
00:15:17
movement of goods. They serve customers
00:15:19
locally and generally pass through
00:15:21
increased input costs contractually to
00:15:23
the end consumer. As we have experienced
00:15:25
in previous periods of stress, markets
00:15:27
move for reasons that often don't
00:15:29
reflect underlying fundamentals. This
00:15:31
creates opportunities for experienced,
00:15:34
well- capitalized investors to invest
00:15:36
for value. Regardless of how the current
00:15:39
administration's trade policies
00:15:40
develops, the US remains a premier
00:15:42
destination for investment globally. It
00:15:45
is energyindependent, boasts the largest
00:15:47
GDP in the world, has the deepest and
00:15:49
most liquid capital markets, and is a
00:15:52
leader in technology and
00:15:53
entrepreneurship. The administration's
00:15:55
objectives focus on lower taxes,
00:15:58
deregulation, and industrialization,
00:16:00
which on balance are positive from a
00:16:02
long-term investment perspective. We
00:16:04
will all get to the other side of this.
00:16:06
So basically what Brookfield is trying
00:16:08
to convey here is that their businesses
00:16:10
while they're not immune to all of the
00:16:12
global uncertainty that's going on right
00:16:14
now. They are pretty well insulated and
00:16:16
this is because Brookfield doesn't do
00:16:18
too much shipping of goods over borders.
00:16:21
What they do is they'll go and set up
00:16:22
shop in a country like India and then
00:16:24
they'll build local businesses or
00:16:26
acquire local businesses within India
00:16:28
and operate in that country. So while
00:16:31
they are an international business,
00:16:33
their businesses are actually pretty
00:16:34
localized in the countries that they
00:16:36
operate in. Bruce is also saying here
00:16:38
that he believes that the world is going
00:16:40
to get through these uncertain times and
00:16:42
that the economy is going to continue to
00:16:44
grow and that the United States remains
00:16:46
a very investable place to well invest.
00:16:50
So Brookfield is going to get through
00:16:51
this. I think all investors are going to
00:16:53
get through this. And this is what I do
00:16:55
as well is I just try to focus on the
00:16:57
long term. And I don't think that 10
00:16:59
years out the the global economy is
00:17:02
going to be completely erect. I think
00:17:03
it's going to be larger than it is now.
00:17:05
And I think that everything is going to
00:17:06
be just fine when we zoom out a bit,
00:17:08
which I think a lot of investors right
00:17:10
now really do need to do is just zoom
00:17:12
out, calm down, get your emotions in
00:17:14
check, and uh continue investing for the
00:17:16
long term. This next screenshot is just
00:17:19
the conclusion of the shareholder letter
00:17:20
where this says, "Over decades of
00:17:22
operations, we have successfully
00:17:24
navigated through many periods of
00:17:25
uncertainty. We remain committed to our
00:17:28
core competencies, investing in
00:17:29
highquality assets and businesses that
00:17:32
compound strong cash returns on equity
00:17:34
while emphasizing downside protection
00:17:36
for the capital employed. Our primary
00:17:38
objective continues to be generating
00:17:40
increased cash flows on a per share
00:17:42
basis, thereby enhancing intrinsic value
00:17:44
per share over the long term. If you
00:17:46
have been watching my channel, then you
00:17:48
know that per share profits growing is
00:17:51
what creates shareholder value for
00:17:53
investors. And the number one focus of
00:17:55
Brookfield Corporation is to increase
00:17:57
its free cash flow on a per share basis.
00:18:00
And this is what the company has always
00:18:01
done. It's why it's compounded massively
00:18:03
over the past 20, 30 plus years. And it
00:18:06
sounds like this is what the company is
00:18:08
going to continue focusing on over the
00:18:09
long term. And that's why I'm remaining
00:18:12
a very happy shareholder. All right,
00:18:13
let's head back over to Stock Unlock
00:18:15
now. And currently, we can see that
00:18:16
Brookfield's market capitalization is
00:18:19
$83.70 billion. Now if we divide this by
00:18:22
their trailing 12 months distributable
00:18:25
earnings of 5.171 billion now and this
00:18:28
is their operating distributable
00:18:29
earnings by the way then we get a price
00:18:31
to distributable earnings of about
00:18:34
16.2. In my opinion this is a very fair
00:18:37
price to pay for a business that is
00:18:39
growing by 27% over the past year. It
00:18:42
has a great management team and I
00:18:44
believe that it is incredibly high
00:18:46
quality. I think that it's probably one
00:18:48
of the best asset managers in the entire
00:18:50
world. And you can even go and compare
00:18:52
them to Apollo or KKR. And when you look
00:18:54
at Apollo and KKR, these companies trade
00:18:57
for a significantly higher price
00:18:59
multiples. So a 16 price to DE I
00:19:02
personally think is quite undervalued.
00:19:05
One, because it's a low multiple
00:19:06
relative to the company's quality and
00:19:08
its growth, and second, because this
00:19:10
multiple is quite a bit lower than what
00:19:12
its peers trade for in the same space.
00:19:15
So, I do think that there is an
00:19:16
opportunity for multiple expansion of
00:19:18
Brookfield Corporation over the long
00:19:19
term, but I'm not going to bake that in
00:19:21
to the DCF that we're about to do right
00:19:23
here. So, I ran a DCF on Brookfield
00:19:26
Corporation today, and I put in the free
00:19:28
cash flow that the business has
00:19:30
generated over the past year now, which
00:19:31
was that
00:19:32
$5.171 billion. I also have the company
00:19:36
growing its free cash flow by 20%
00:19:38
annually, which is actually below what
00:19:40
they are expecting to do over the next 5
00:19:42
years. They're projecting about 25%
00:19:44
annual growth. So 20% growth is on the
00:19:47
lower end of what the company is
00:19:48
expecting to produce. I also have them
00:19:50
buying back 1% of their shares on an
00:19:52
annual basis over the next 5 years,
00:19:54
which they're currently doing, and
00:19:55
trading for a 16 price to distributable
00:19:58
earnings, which is what they're
00:19:59
currently trading for. So no multiple
00:20:01
expansion over the next 5 years. And if
00:20:04
Brookfield can do this and simply meet
00:20:06
their targets and continue buying back
00:20:08
shares, then the stock could compound by
00:20:10
about 18% annually over the next 5 years
00:20:13
from its current share price. Its fair
00:20:15
value would also be about $83 per share.
00:20:19
And I do think that this is probably
00:20:20
around where the fair value of the
00:20:22
business is. So when I take a look at
00:20:24
these metrics right here, when I take a
00:20:26
look at the price of the business, its
00:20:27
quality, and its future outlook, I think
00:20:29
that Brookfield stock is still quite
00:20:31
cheap in the market. And I actually
00:20:33
bought more shares in the market today
00:20:35
after earnings. I am completely fine
00:20:37
averaging up, buying near all-time
00:20:39
highs, buying on a day where the stock
00:20:40
is up 4%. Because when I take a look at
00:20:43
the price of this business relative to
00:20:45
its fundamentals and its underlying
00:20:47
value, I do think that it is still very
00:20:50
undervalued and could continue to
00:20:51
outperform the S&P 500 over the next 5
00:20:54
years and over the long term. So, for
00:20:56
those reasons, I'm not really focused on
00:20:59
where the stock is trading right now. If
00:21:01
it's up 25% over the past month, if it's
00:21:03
near all-time highs, I really just don't
00:21:05
care. I could care less. What I care
00:21:08
about is what is what what do I think
00:21:10
the actual value of the business is? And
00:21:12
right now, I think the value of the
00:21:14
business is probably around $83 per
00:21:16
share US. And as long as the stock
00:21:19
remains below that, I'm probably going
00:21:21
to continue just dollar cost averaging
00:21:23
and buying more and more shares of
00:21:24
Brookfield Corporation. So, this stock
00:21:27
has been a massive, massive winner in my
00:21:29
portfolio, especially when I factor in
00:21:31
the realized gains that I took on
00:21:33
Brookfield Asset Management to put more
00:21:35
into my BN shares. This is by far the
00:21:38
largest gainer that I've ever had in my
00:21:40
portfolios. And it's been a massive
00:21:42
winner for me. But what's interesting is
00:21:44
whenever I talk about Brookfield, I
00:21:46
always get comments like, "This is such
00:21:48
a boring company. No one cares about
00:21:49
Brookfield. Why are you talking about
00:21:50
it?" But I guess people just don't like
00:21:53
making money. I I I find it crazy. Like
00:21:55
this is such a great business in my
00:21:57
opinion. It's extremely high quality. It
00:21:59
has a great track record, great
00:22:01
management, very aligned insiders that
00:22:04
own 20% of the entire company. They're
00:22:06
also exposed to so many different mega
00:22:09
trends that I think are going to
00:22:10
continue for decades to come. And in
00:22:13
like to me, it just seems like this
00:22:14
business is almost obviously going to
00:22:16
grow. And I think the price is also
00:22:18
extremely fair. So, I don't know. I I
00:22:21
don't know why people don't like when I
00:22:22
talk about Brookfield so much, but you
00:22:24
know, it's the largest position in my
00:22:25
portfolio. I strongly believe this one
00:22:27
is going to continue to be a winner for
00:22:29
me. So, I'm going to continue sharing my
00:22:31
analysis on it and let you guys know
00:22:33
what I'm doing with my position. But, I
00:22:35
could talk about Brookfield all day. So,
00:22:37
I'm going to stop myself and wrap up the
00:22:39
video there. So, if you did enjoy the
00:22:40
video, then please leave a like on it
00:22:42
and let me know what you think about
00:22:43
Brookfield down in the comment section
00:22:45
below. And I'll do my best to respond to
00:22:47
you guys and answer as many questions as
00:22:48
I possibly can. Also, if you're new here
00:22:50
and you want to stick around and see
00:22:52
more investment content like this, then
00:22:54
please consider subscribing to my
00:22:55
channel because that would be pretty
00:22:57
awesome. And lastly, as always, thank
00:22:59
you so much for tuning in. I truly do
00:23:01
appreciate it and I hope to see you
00:23:03
again in my next
