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This Elite Wealth-Creating Machine Is a Screaming Bargain These Days

Motley Fool - Thu Mar 26, 9:35AM CDT

Key Points

  • Brookfield Corporation expects to grow its earnings at a 25% annualized rate over the next five years.

  • The company currently trades at a steep discount to its estimated value of $68 per share.

  • It expects to grow its per-share value to $140 by 2030.

Brookfield Corporation(NYSE: BN) has enriched its investors over the years. The global investment management firm has delivered a 19% annualized return over the last 30 years. That has absolutely crushed the S&P 500's 11% annualized return during that period. To put its returns into perspective, Brookfield has turned a $10,000 investment made three decades ago into over $1.8 million today.

The leading alternative investment firm expects to deliver brisk growth in the coming years. Despite that, its shares trade at a huge discount to Brookfield's estimated value, making the stock a screaming bargain right now.

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A person using a pen to point at a stock chart on a tablet.

Image source: Getty Images.

Robust growth ahead

Brookfield has built a leading global investment firm with three core businesses: alternative asset management, wealth solutions, and operating businesses, including infrastructure, renewable power, private equity, and real estate. The company believes its best growth days lie ahead. Several catalysts position it to deliver transformative growth over the next five-plus years, including AI infrastructure investment, aging populations demanding new wealth products, and the global real estate recovery.

The company believes AI infrastructure is a once-in-a-generation investment opportunity. It estimates that the world will need to invest over $7 trillion in the coming decade to build out the data centers, power generation capacity, and related infrastructure to support the adoption of AI. Brookfield is launching funds and making other investments to capitalize on this megatrend.

AI investment, along with Brookfield's other growth drivers, should drive 25% annualized earnings-per-share growth over the next five years. That's an acceleration from the 22% growth rate Brookfield delivered over the last five years.

A bargain price

Brookfield estimates that the company is currently worth about $68 per share based on the value of its three core businesses. That's up 22% from 2024's level of $56 per share.

However, its shares currently trade at around $40. They're down about 20% from their 52-week high due to issues facing the private credit market and the war with Iran. That's a more than 40% discount to the company's estimated value.

Brookfield expects its robust earnings growth to increase the firm's value to $140 a share by 2030, using a very conservative valuation multiple. That implies Brookfield could deliver a return of more than 250% over the next five years from the current share price.

An incredible bargain

Brookfield Corporation has been a wealth-creating machine over the years. It firmly expects to continue growing shareholder value by capitalizing on megatrends such as AI infrastructure. Despite its historical returns and growth prospects, shares trade at a deep discount to Brookfield's estimated value. That makes it a screaming bargain buy right now that investors won't want to miss.

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Matt DiLallo has positions in Brookfield Corporation and has the following options: short July 2026 $40 puts on Brookfield Corporation. The Motley Fool has positions in and recommends Brookfield and Brookfield Corporation. The Motley Fool has a disclosure policy.

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