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Fundamental analysis: Brookfield Corporation (BN)

Awarener score: 6.2

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Average), the business stability (Average) and growth (Good), and the company's inclination to return cash to the stockholders (Modest).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 6.5

  • Business has been growing at a good pace. It's been similar to peer companies.
  • Brookfield Corporation business trend stability is run-of-the-mill. The higher the stability, the lower the risk. It looks well ranked against rivals.

Margins score: 7.2

  • BN profit margins -on goods and services sold- are usually meagre. They stand slightly worse than rival companies.
  • Business profit on sales tends to be excellent. It's similar to competitors.
  • Profits on sales made -available to repay debt and purchase properties- are usually very good. They remain in a weak position compared to peers.
  • Earnings -before income taxes and interests on loans taken- tend to be very good in relation to total revenues. They're still worse than most similar companies.
  • Profits -before income taxes- are usually very good considering total sales, and remain substantially worse when measured against rivals.
  • Total net profit tends to be sufficient when confronted to sales. Company stands substantially worse when measured against comparable firms.

Growth score: 6.7

  • Brookfield Corporation profit -on goods and services sold- has been growing at a very low pace. It's been lacking compared to competitors.
  • In recent years, earnings -on operations- have been growing at a normal step, which has been somewhat better than comparable firms.
  • Profits -available to repay debt and purchase properties- have been growing at a good pace, which compares similar to peer enterprises.
  • Earnings -before income taxes and interests on loans taken- have been growing at a good tempo. It turns to be close to average when compared to similar stocks.
  • In past years, profits -before income taxes- grew at a good speed. It was somewhat better than rivals.
  • In the previous years, growth trend on total net profit has been very good, and encouraging in relation to peer companies.
  • Earnings per share have grown at a very good rhythm in past years. It's been a slight improvement compared to industry peers.

Miscellaneous score: 8.0

  • BN managed to pay little to no income taxes on profits made in the past years. It's been slightly better than peers.
  • The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
  • We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 6.0

  • Brookfield Corporation usually gets sufficient returns on the resources it controls. It proves weak when measured against peer firms.
  • The company normally gets sufficient proceeds -on the resources directly invested in the business-. They remain in a weak position compared to similar companies.
  • There's usually some profitability -in relation to owned resources-. It ranks below average when measured against competitors.
  • In the past, got sufficient returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's weak when measured against comparable enterprises.

Usage of Funds score: 5.6

  • BN usually uses a very large portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is heavy. It stands weak when measured against rival firms.
  • The company is usually replacing most of the property, plant, and equipment that gets old, and saving a little funds for something else, which is more than average in relation to industry peers.
  • In the past twelve months it paid some dividends, considering the current stock price. It came mediocre against competitors.
  • Has increased dividend payments in the past years. Business prospects may have improved. The company has behaved a slight improvement compared to similar firms.
  • Dividend payments usually represent a modest portion of genuine funds generation and shouldn't be at risk. Sustainability looks somewhat better than comparable companies.
  • The company somewhat enlarges a bit the pool of investors, resulting in more mouths feeding on the pie of profits. It remains close to average when compared to peer enterprises.
  • Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands close to average when compared to rivals.
  • The company uses a modest portion of genuine fund generation to reward investors, which can probably be sustained. It still looks encouraging in relation to competitors.

Balance Sheet score: 4.4

  • Brookfield Corporation intangible assets (like brands and goodwill) represent a very large portion of resources controlled, according to accounting books. There could be major difficulties in liquidating them if the company ever gets in financial distress. It happens to be last-in-rank when measured against peer companies.
  • The company has somewhat lower short-term resources than short-term obligations. Unless it's part of the business model, there might some liquidity concerns. It turns to be a disappointment compared to similar firms.
  • A significant part of resources controlled were provided for with financial debt. Creditors have almost as many claims on the company as shareholders. It remains bottom tier against rival firms.
  • Controlled resources take time to be turned into cash and equivalents, which is somewhat risky. It looks below average when measured against rivals.
  • For every dollar of short-term obligations, the company has less than a dollar of cash and short-term receivables. It's a disappointment compared to peer firms.
  • For every dollar of short-term obligations, the company has few cents of cash and equivalents, which is bottom tier against similar enterprises.
  • Usually, sales are on somewhat less than three months credit. It still ranks substantially worse when measured against peers.
  • Normally has approximately somewhat less than two months of sales worth in inventory. It comes up as a disappointment compared to competitors.
  • On average, it takes higher than four months from the purchase to charging customers. It happens to be bottom tier against peers.
  • On average pays suppliers approximately four months or higher after the purchase. It ranks great when measured against industry peers.
  • The company charges its customers before it must pay its suppliers, so the more it sales, the more free funds it gets. It's in good shape compared to similar companies.
  • Usual business earnings are mostly consumed by net interest expenses. Creditors may be earning money by assuming risks, but stockholders not so much. Profitability must increase, lest the firm risks only working for creditors' benefit. It stands worse than most rival firms.
  • Business earnings have usually been extremely low when measured against loans taken. Even severely cutting back reinvesting in the business, it could take more than twenty years to repay the obligations. Additional stockholders' funding may be a quicker way, but at the cost of increasing the mouths to feed on the eventual pie of profits. It ranks substantially worse when measured against comparable enterprises.
  • Last twelve months revenues were non-significant in relation to fixed assets. The company must improve income to take advantage of used resources. It looks a disappointment compared to similar firms.
  • Resource exploitation is low when yearly sales are considered, business volume must be significantly increased. This metric is normally tied to the industry where the firm belongs. It's still slightly better than peer companies.

Valuation score: 5.3

  • Brookfield Corporation looks heavily expensive in relation to profits and financial position. It happens to be substantially worse when measured against competitors.
  • Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains a disappointment compared to peers.
  • In the past twelve months, the company generated some free funds in relation to the stock price, which stands mediocre against similar companies.
  • The company usually generates somewhat more than enough genuine funds to cover up for its business needs. Surplus cash may be used to repay loans, to eventually buy new businesses, or to reward investors. Considering the financial position and stock price, the current valuation might be reasonable. It's still weak when measured against industry firms.
  • In the past twelve months, the company has slightly enlarged the pool of investors by issuing new shares. The pie of earnings will now be split among a little more stockholders. It came up in a weak position compared to peer ventures.
  • The company is drowned in loans. It almost belongs more to the creditors than the stockholders. The situation may be dire. It looks bottom tier against similar enterprises.
  • Considering the past twelve months, traditional Price-to-Earnings relation might be more or less reasonable, but hardly cheap. It ranks almost average when measured against peer companies.
  • Comparing the current stock price with the past twelve-months revenues gives a not far from one-to-one relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks impressive in relation to rival firms.
  • The relation between the stock price and accounting book value might be more than reasonable. It's important both to check this metric through time and to compare it with rival companies. The company remains slightly better than peer firms.
  • In the past twelve months, the operating business earned some money when compared to the current stock price and financial position. It happens to be below average when measured against industry peers.
  • In an alternate metric of bang for the buck, the company has usually shown a good earnings power ability when measured against the current stock price and financial position. It's still in a weak position compared to peer companies.

Total score: 6.2


BN logos

Company at a glance: Brookfield Corporation (BN)

Sector, industry: Financial Services, Asset Management

Market Cap: 60.68 billions

Revenues TTM: 81.20 billions

Brookfield Corporation is an alternative asset manager and REIT/Real Estate Investment Manager firm focuses on real estate, renewable power, infrastructure and venture capital and private equity assets. It manages a range of public and private investment products and services for institutional and retail clients. It typically makes investments in sizeable, premier assets across geographies and asset classes. It invests both its own capital as well as capital from other investors. Within private equity and venture capital, it focuses on acquisition, early ventures, control buyouts and financially distressed, buyouts and corporate carve-outs, recapitalizations, convertible, senior and mezzanine financings, operational and capital structure restructuring, strategic re-direction, turnaround, and under-performing midmarket companies. It invests in both public debt and equity markets. It invests in private equity sectors with focus on Business Services include infrastructure, healthcare, road fuel distribution and marketing, construction and real estate; Industrials include manufacturers of automotive batteries, graphite electrodes, returnable plastic packaging, and sanitation management and development; and Residential/ infrastructure services. It targets companies which likely possess underlying real assets, primarily in sectors such as industrial products, building materials, metals, mining, homebuilding, oil and gas, paper and packaging, manufacturing and forest product sectors. It invests globally with focus on North America including Brazil, the United States, Canada; Europe; and Australia; and Asia-Pacific. The firm considers equity investments in the range of $2 million to $500 million. It has a four-year investment period and a 10-year term with two one-year extensions. The firm prefers to take minority stake and majority stake. Brookfield Corporation was founded in 1997 and based in Toronto, Canada with additional offices across Northern America; South America; Europe; Middle East and Asia.

Awarener score: 6.2

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Average), the business stability (Average) and growth (Good), and the company's inclination to return cash to the stockholders (Modest).