Transcript
Host
Welcome back. Brookfield shares of Brookfield Corp (BN on the TSX) have risen by more than 50% over the past 52 weeks. And this morning, the company has issued fourth quarter results. For a close look at those numbers and the stock, we're joined by Christopher Ballard, managing director of Check Capital Management. He's joining us from Mission Viejo, California. Chris, thanks a lot for joining. What's your take on these numbers and and what what do you look at primarily when Brookfield Corporation releases results? This is not really an earnings per share story in terms of might move the stock. What, what are the key lines you go to?
Chris Ballard
There's a lot to look at when it comes to Brookfield Corporation. They have quite a few subsidiaries that are also publicly traded that we look at closely. One of the biggest ones is Brookfield Asset Management, which reported yesterday as well and they reported fabulous numbers. So what we're looking at is distributable earnings from these businesses. We’re also looking at the general net worth of Brookfield Corporation, how it grows over time. But yesterday when Brookfield Asset Management reported, which I had a chance to dive into those numbers a little bit more, you're able to see that they were raised about $135 billion of new capital that they're able to deploy. When Brookfield Asset Management deploys its capital, they earn higher rates of return than other subsidiaries do. And so it's, it's really a creed to the bottom line for Brookfield Corp. When they also raise these assets, they can sit on them for quite a while before deploying them so they can almost time the growth story for the parent company as a whole and even growing 15 to 20% annualized now for quite a while as they did again last year. And Brookfield Asset Management now manages more than $1 trillion. They’re a global leader in investment infrastructure and all different aspects of renewable energy across the world. And so they're now they're actually on pace. We're looking at $2 trillion under management really being the next goal. We also look at other aspects of like AI, which is the big news these days. They partnered with France just last week. The news came out that Brookfield Corporation is going to do it, make a $20 billion investment with France on AI infrastructure. And just last week, you know, France had their AI conference, it was really well televised. So they have aspects of of infrastructure, renewable energy, real estate data centers and a lot to look at with Brookfield across the board. But we're pleased that their numbers are continuing to buy back stock, which is important to shareholders as really long-term shareholders and they're increasing their dividend. They just announced a 13% dividend increase as well. So all those aspects are kind of what we're looking at, to make sure that they're firing on all cylinders, which which they really are as they are. You're going hard pressed over state how much of a global leader that Brookfield is across various segments all over the world. And they are, they rapidly are rapidly growing. They don't seem to be stopping anywhere in the near future.
Host
Just to reference a couple low lines you mentioned this morning's Brookfield Corporation results. Distributable earnings came in at $1.6 billion U.S. that was up 23% from the same quarter in 2023. And the company said it ended the quarter with a record $160 billion U.S. of capital available to deploy into new investments. To what degree do the numbers at one of the subsidiaries like like Brookfield Asset Management signal what we may see at at the parent Brookfield Corporation?
Chris Ballard
They're, they're signalling a lot of success. But beyond that, they are actually delivering the success. So the solutions numbers of some of what you just cover there, they are growing that very rapidly. Wealth Solutions made some acquisitions last year, including American Equity Insurance Investments where they were managing about $100 billion. Now, like you're mentioning $160 billion. That distributable earnings has doubled year over year. Their run rate right now to have about $1.6 billion of distributable earnings like you mentioned, it looks like they're growing about 15% right now. So they're far off $2 billion of distributable earnings. The assets that they have acquired, were getting lower rates of return across the board because that's insurance company typically are very conservative on how to go about investing. But Brookfield Corporation as the parent is so big that they can deploy the capital in a more aggressive manner and historically had much higher rates of return. So as they get new assets and they deploy those assets in a higher rate of return, it just makes these compounding machines grow that much faster. All that's very important to us. It's actually one of the main things we're looking at right now. It's actually super exciting. They don't really seem to be slowing down in that segment at all. And they're leaning into it with more and more acquisitions. Also outside of that when it comes to like global infrastructure they made a purchase from American Tower where they bought 67 thousand telecom towers in India. So you know, in India, if you're going to get telecom service, a lot of could be coming from a wholly owned subsidiary of Brookfield Corporation as well. Also with Microsoft, Microsoft is building out AI infrastructure across the United States and that takes a lot of energy to power, these sort of you know, models and Microsoft is partnering with Brookfield on a $10 billion dollar investment to use Brookfield’s renewable energies because Microsoft also use clean energy when they're when they're using these new AI infrastructures. So just a couple other components outside of just the well solutions aspect, but which which were very familiar with and love how they’re deploying their capital.
Host
Chris, thanks a lot for joining us on this today.