Investing

Brookfield Companies

  • Last Updated:
  • Nov 9th, 2018 7:58 am
70 replies
Member
Sep 27, 2015
208 posts
59 upvotes
Pickering, ON
Bought BIP.UN at $54... the stock is below $54 currently... lets see what the future holds
Deal Addict
Jul 27, 2017
1575 posts
547 upvotes
GTA
looking at the 5yr & 10 yr performance of BIP.UN & BAM

BIP is the better performer as well as a higher paying distribution/dividend, loses money

BAM in the past 5 years appears more stable, low dividend payout, has positive EPS

I don't have either stock
[OP]
Sr. Member
Feb 26, 2017
771 posts
360 upvotes
porticoman wrote:
Jul 9th, 2018 4:58 pm
looking at the 5yr & 10 yr performance of BIP.UN & BAM

BIP is the better performer as well as a higher paying distribution/dividend, loses money

BAM in the past 5 years appears more stable, low dividend payout, has positive EPS

I don't have either stock
BIP is set up as as pass through limited partnership with BAM as its general partner. Its similar to how MLPs and Yieldcos are set up. Its better to look at BIPs results based on their Funds from Operations instead of EPS.

Its a pretty hard stock to evaluate. I normally use Fastgraphs but its not been much help with BIP. I think the easiest way to look at the stock is to look at their yield compared to where its been historically. I would also look at their payout ratio and their credit rating and their Debt to Ebitda. The article I linked to above does a better job explaining this.
Deal Addict
May 22, 2003
2876 posts
1248 upvotes
Vancouver
I own BIP.UN in my RRSP and BAM.A in my corporate trading account, both have done well. These are "forever hold" stocks for me and I look forward to adding more shares over the years.
Sr. Member
User avatar
May 29, 2005
583 posts
93 upvotes
Nepean
I own BIP.UN, in my RRSP to simplify my accounting. I had it in my non-registered account for a few years and it just got too confusing. Now that it's in my RRSP I can drip the nice dividend. I also own BAM in my RESP for the kids and is 30% of their portfolio.

I've done some reading on Brookfield and the more I read the more I'm convinced that they know what they are doing. I don't like the complicated schemes that they have nor the amount of spin offs they've done but you can't argue with their performance. The biggest thing for me is that they are really good at buying distressed assets and fixing them up. It's my cheap way of off loading "buy low sell high" to someone else. Recently, the ENB transaction to BIP gave me a double positive wammy!!!

This year I've added BEP.UN and BPY.UN to some sheltered accounts. BEP.UN because they've been beaten down like all utilities and their set of renewable assets andt BPY.UN to replace my REI.UN.

BEP, BIP, and BEP all have growing dividend rates as part of their business model unlike standard reits and income trusts.
Deal Addict
User avatar
Apr 23, 2009
1476 posts
426 upvotes
OP, thank you for this thread. Brookfield companies are my top holdings, have always been. They specialize in buying income producing properties at fire sell prices. The only exception in the recent times is their purchase of ENB gas properties for which they paid fair value (which is not the norm for them).

This article says it all about their investment philosophy.
https://www.theglobeandmail.com/news/ce ... e37036767/
Deal Fanatic
User avatar
Jun 19, 2009
5005 posts
884 upvotes
Scarborough
ruchir wrote:
Jul 10th, 2018 10:57 am
OP, thank you for this thread. Brookfield companies are my top holdings, have always been. They specialize in buying income producing properties at fire sell prices. The only exception in the recent times is their purchase of ENB gas properties for which they paid fair value (which is not the norm for them).

This article says it all about their investment philosophy.
https://www.theglobeandmail.com/news/ce ... e37036767/
It's behind a paywall, do you mind copy/pasting the article?

Thanks
Deal Addict
User avatar
Apr 23, 2009
1476 posts
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SkimGuy wrote:
Jul 12th, 2018 9:45 am
It's behind a paywall, do you mind copy/pasting the article?

Thanks
I don’t mind but it’s 17 + pages. I have a PDF copy. Send me a pm with your email and I will forward it to you. Thanks
Sr. Member
User avatar
May 29, 2005
583 posts
93 upvotes
Nepean
To get pass the paywall, just stop the page from loading by pressing "x" before it engages the paywall. It may take a few tries, but it works.
Deal Fanatic
User avatar
Jun 19, 2009
5005 posts
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Scarborough
jamzbe wrote:
Jul 12th, 2018 1:54 pm
To get pass the paywall, just stop the page from loading by pressing "x" before it engages the paywall. It may take a few tries, but it works.
Holy crap, that actually worked. Lol
[OP]
Sr. Member
Feb 26, 2017
771 posts
360 upvotes
Found this on TDDI from a Globe and Mail article
Brookfield Infrastructure Partners LP’s (BIP.UN-T, BIP-N) proposed $4.3-billion acquisition of Enercare Inc. (ECI-T) is “attractive from a strategic and valuation perspective,” according to Desjardins Securities analyst David Newman.

“We view the transaction in a positive light and believe the offer price by BIP is attractive. We recommend investors tender their ECI shares,” said Mr. Newman, leading him to move his rating for Enercare shares to “tender” from “buy.”

The analyst feels the deal, announced Wednesday before market open, will accelerate Enercare’s growth plans, noting: “CI’s growing capex program used to fund its long-tailed growth initiatives (eg U.S. HVAC rental roll-out, sub-metering installations, Smarter Home program), efforts to consolidate the fragmented U.S. HVAC market via tuck-in acquisitions and dividend program were straining the company’s cash flows and balance sheet. This created an overhang in ECI’s shares. We believe BIP will take a longer-term view.”
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User avatar
Apr 23, 2009
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Chance7652 wrote:
Aug 2nd, 2018 8:14 am
Found this on TDDI from a Globe and Mail article
What I really like in Brookfield’s approach is that are always looking for assets that are generating healthy cash flows. Their model is highly scalable. They are hugely diversified, buy companies generating healthy cash flows at bargain prices and can easily sell individual companies if needed to scale down. Since the existing companies generate a lot free cash flow, they are always buying.
[OP]
Sr. Member
Feb 26, 2017
771 posts
360 upvotes
ruchir wrote:
Aug 2nd, 2018 8:56 am
What I really like in Brookfield’s approach is that are always looking for assets that are generating healthy cash flows. Their model is highly scalable. They are hugely diversified, buy companies generating healthy cash flows at bargain prices and can easily sell individual companies if needed to scale down. Since the existing companies generate a lot free cash flow, they are always buying.
I don't get this acquisition at first glance due to the price they paid. I'll give them the benefit of the doubt though as I think Brookfield know what they're doing.

On another note, what % do some of posters here have in BIP vs BAM? I have about 4x as much BIP as I have BAM. I'm considering selling some BIP to buy BAM at some point to even this out a bit. What makes me a bit hesitant is that BIP is one of my best performing stocks. This type of move has also gone really badly for me in the past (ie selling ENF to buy ENB).
Deal Addict
Nov 9, 2013
2490 posts
1142 upvotes
Edmonton, AB
Chance7652 wrote:
Aug 2nd, 2018 9:07 am
I don't get this acquisition at first glance due to the price they paid. I'll give them the benefit of the doubt though as I think Brookfield know what they're doing.

On another note, what % do some of posters here have in BIP vs BAM? I have about 4x as much BIP as I have BAM. I'm considering selling some BIP to buy BAM at some point to even this out a bit. What makes me a bit hesitant is that BIP is one of my best performing stocks. This type of move has also gone really badly for me in the past (ie selling ENF to buy ENB).
Personally I only hold BAM but that's largely because my holding is in a taxable account, and so the BIP.UN distribution would not be as tax efficient as the dividend.

The other thing to consider is roll up risk (i.e. what's happening with ENB and it's sponsored entities).

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