Q: Can you please comment on any concerns about this company as well as perhaps some positives, including some of the items below?
- its profitability during a potential recession.
- 2.7% earnings yield
- High Enterprise / EBITDA ratio
Thanks.
- its profitability during a potential recession.
- 2.7% earnings yield
- High Enterprise / EBITDA ratio
Thanks.
5i Research Answer:
We have comments posted now on the Q3 release. We like the company a lot; it is well managed and set up well for future growth. Because of the 'split' of BN/BAM, we do not have a long history of financials, but the predecessor company has survived many downturns and still prospered nicely. Its fee business will continue in a recession, but new business may slow. But in a recession we would fully expect it to deploy capital on new deals for future growth. It has a premium value as it has premium qualities. But it is still relatively cheaper than US peers, which is why the parent company was interested in spinning it out separately.