TSX:BAM - Post Discussion
Post by
retiredcf on Jan 09, 2023 10:54am
TD
Have a US$47.00 target. GLTA
Brookfield Asset Management Ltd.
(BAM-N, BAM-T) US$29.78 | C$40.06
NCIB Established to Repurchase Up to 10% of the Public Float Event
BAM announced that the TSX has accepted a notice filed by BAM of its intention to commence an NCIB. Purchases will be made through the TSX, the NYSE, and/or alternative trading systems.
Impact: POSITIVE
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We interpret this announcement as a signal of management's confidence in BAM's future business prospects, and of management's intention to repurchase stock opportunistically, as Brookfield has done historically. The NCIB enables the repurchase of up to 31.8mm shares, representing ~10% of the public float (current market value of ~$950mm), and extends from January 11, 2023 to January 10, 2024.
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BAM is a leading global alternative asset manager that we see as very well- positioned in higher-demand areas: the company is dominant in infrastructure and renewables, a global leader in real estate, and a first-mover in transition investing.
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As of December 28, 2022, BAM had ~412mm shares outstanding, representing a ~25% interest in the asset management franchise, with the remaining ~75% held by Brookfield Corp. Of the ~412mm shares outstanding, the public float consists of ~318mm shares.
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BAM's initial balance sheet has no debt and includes ~$3bln of cash and financial assets, some of which will be required to run the business. We are forecasting 2023E distributable earnings (DE) of ~$2.3bln, of which BAM expects to pay out ~90% as dividends, leaving ~$235mm available for reinvestment; however, we note that BAM also has access to the considerable financial resources of its parent, Brookfield Corp.
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BAM is trading at 18.9x 2023E and 15.3x 2024E fee-related earnings, multiples that we consider very reasonable for a unique franchise that is growing at ~20%. The current share-price offers a 4.3% dividend yield.
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