Canadians can Consider Brookfield Asset Management and Exchange Income for Passive Income

Canadians seeking passive income can consider investing in dividend-growth stocks such as Brookfield Asset Management (TSX:BAM) and Exchange Income (TSX:EIF). These dividend stocks are trading at attractive valuations and are well positioned to keep growing their payouts in 2023 and beyond.
Brookfield Asset Management (BAM) is one of the largest and fastest-growing alternative asset managers globally, with assets under management (AUM) totaling US$825 billion. The company operates in 30 countries across five continents and generates significant fee-bearing AUM of around US$432 billion. BAM pays investors an annual dividend of $1.70 per share, translating to a forward yield of 3.8%.
BAM expects its fee-related earnings to grow between 15% and 20% annually, which should support future dividend raises. With a debt-free balance sheet and a payout ratio of 90%, BAM is well-positioned for future growth. The company benefits from its massive scale, enabling it to increase capital flows across various sectors such as renewables, infrastructure, real estate, private equity, and credit. Additionally, BAM has US$175 billion of discretionary capital available for investments, further expanding its cash-generating assets.
Exchange Income (EIF) is another TSX stock that offers a forward yield of 4.9%. Over the past 10 years, EIF has returned 277% to shareholders after adjusting for dividends. Despite its strong performance, EIF is currently priced at 14.5 times forward earnings, representing an attractive valuation. Analysts forecast that EIF will increase earnings by 11.5% annually over the next five years.
EIF operates in verticals such as aviation, aerospace, and manufacturing. It invests in companies within niche markets, allowing it to generate predictable cash flows. The company has a successful track record of maintaining and increasing its dividend payouts over the years, with dividends growing from $68.5 million in 2018 to $97.5 million in 2022. The payout ratio has also reduced from 60% to 55% during this period.
Analysts remain optimistic about EIF stock and expect it to surge over 30% in the next 12 months.
Overall, investing in these dividend-growth stocks provides Canadians with the opportunity to generate passive income and benefit from the growth potential of these reputable companies.

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