How does Brookfield's performance and valuation compare to peers in the wealth management and financial services sector?
Short answer:
Based solely on the brief Globe Newswire release, there isn’t enough quantitative information to make a concrete performance‑or‑valuation comparison between Brookfield Wealth Solutions (BNT) and its peers in the wealth‑management/financial‑services universe. The press release tells us only that Brookfield posted its Q2 2025 results and announced a 3‑for‑2 stock split, but it does not disclose the key financial metrics (revenue, earnings, growth rates, profit margins, cash‑flow figures, balance‑sheet ratios, or valuation multiples) that are required for a meaningful peer‑analysis.
Below is a structured framework you can use (and the data you’ll need) to evaluate Brookfield’s performance and valuation relative to comparable firms such as Morgan Stanley (wealth‑management division), UBS Wealth Management, RBC Wealth Management, Goldman Sachs Wealth Management, and independent players like Charles Schwab, Fidelity, and E*TRADE/Charles Schwab’s (now Schwab‑Citi). Once the detailed numbers are in hand, you can apply the steps below to reach a definitive answer.
1️⃣ What you need to know (the “missing data”)
| Category | Key metric(s) | Why it matters | Typical source |
|---|---|---|---|
| Revenue / Net Income | Q2 revenue, YoY growth, Net income, EPS | Shows top‑line momentum and profitability. | Company earnings release; 10‑Q; press release. |
| Margins | Gross, operating, and net margins (% of revenue) | Indicates operational efficiency. | Same as above. |
| Cash‑flow & Balance sheet | Operating cash flow, free‑cash‑flow, net debt, cash‑to‑debt ratio, asset‑under‑management (AUM) growth | Liquidity and financial health. | 10‑Q, 10‑K, MD&A. |
| AUM growth | % change YoY & QoQ in assets under management (or assets under custody) | Core driver for wealth‑management revenue. | Investor presentations; regulatory filings. |
| Profitability per AUM | Revenue per $1 M AUM, Net income per $1 M AUM | Efficiency of converting assets into profit. | |
| Valuation multiples | Price‑to‑Earnings (P/E), Price‑to‑Book (P/B), EV/EBITDA, Price‑to‑Revenue (P/R), Price‑to‑AUM (if disclosed) | Allows side‑by‑side comparison with peers. | |
| Return on Equity (ROE) & Return on Assets (ROA) | ROE, ROA, Return on Invested Capital (ROIC) | Measures how well equity/ assets are being deployed. | |
| Dividend yield & payout | Dividend per share, payout ratio, dividend growth | Important for income‑focused investors. | |
| Share‑structure changes | Details of 3‑for‑2 split (effective date, impact on per‑share metrics) | Affects EPS, P/E, etc., but not fundamental economics. | |
| Peer‑group data | Same metrics for a comparable set of wealth‑management firms (bank‑linked and independent) | Provides the “peer” reference. | Bloomberg, FactSet, S&P Capital IQ, MSCI. |
| Macro/Industry context | Industry‑wide growth rates, regulatory trends, interest‑rate outlook, market‑share shifts | Helps interpret whether Brookfield is outperforming or under‑performing the macro environment. | Industry reports (e.g., McKinsey, BCG, Deloitte wealth‑management outlook). |
Bottom line: without any of these numbers, we can only describe the process for comparison, not the result.
2️⃣ How to compare once you have the data
A. Performance Comparison
| Metric | Brookfield (target) | Peer #1 | Peer #2 | Interpretation |
|---|---|---|---|---|
| Revenue growth YoY | e.g., +9% | 6% (Morgan Stanley), 8% (UBS) | 5% (RBC) | Brookfield outpaces peers if >10% growth. |
| Operating margin | e.g., 22% | 20% (Goldman) | 19% (Charles Schwab) | Higher margin = superior cost control. |
| AUM growth | 12% YoY | 10% (UBS), 13% (Fidelity) | – | Slightly below best‑in‑class but still strong. |
| Net profit margin | 15% | 13% (MorganStanley) | 14% (RBC) | Better profitability. |
| ROE | 16% | 12% (UBS) | 15% (Goldman) | Higher return on equity. |
| Free cash flow | $200 M | $180 M (MorganStanley) | $210 M (Fidelity) | Comparable; check trends. |
What to look for – Is Brookfield growing its AUM faster than peers? Does it translate that growth into higher margins and returns? Is the earnings‑per‑share (EPS) growth and free‑cash‑flow generation in line with or better than peers? If yes, it signals operational strength.
B. Valuation Comparison
| Multiple | Brookfield | Peer #1 | Peer #2 | Interpretation |
|---|---|---|---|---|
| P/E | 13x | 14x (MorganStanley) | 12x (UBS) | Slightly cheaper than MorganStanley; a modest discount vs. UBS. |
| P/B | 1.8x | 2.1x | 1.6x | Mid‑range, suggesting the market sees Brookfield as fairly valued relative to book value. |
| EV/EBITDA | 7.5x | 8.0x | 6.9x | Competitive; a lower multiple may indicate a relative valuation discount (or lower growth expectations). |
| Price‑to‑AUM | 0.15% | 0.14% (UBS) | 0.18% (RBC) | Near parity; investors treat AUM similarly across peers. |
| Dividend Yield | 2.2% | 2.0% (MorganStanley) | 1.8% (RBC) | Slightly higher yield – attractive for income investors. |
Key takeaway – If Brookfield’s multiples are roughly in line or modestly cheaper than peers and its growth/ profitability metrics are equal or better, it may be undervalued relative to its peers. Conversely, if its multiples are higher but growth is slower, the stock could be overvalued.
3️⃣ What the 3‑for‑2 Stock Split Means for the Comparison
- Per‑share numbers (EPS, dividend per share, price per share) will be reduced by a factor of 2/3 (i.e., each share’s value is split).
- Total market capitalisation, earnings, cash‑flow, and valuation multiples stay unchanged (the split is purely a mechanical adjustment.
- Analysts typically adjust historical EPS and price data to “post‑split” levels so that the P/E and other multiples remain comparable.
- Investors should focus on the underlying fundamentals—the split does not signal a performance change.
4️⃣ Suggested Next Steps
- Pull the full Q2 2025 earnings release from Brookfield’s investor‑relations portal. This will contain:
- Consolidated income‑statement and balance‑sheet numbers.
- AUM and AUM‑growth figures.
- Commentary on operating performance, cost‑structure, and outlook.
- Gather peer data for the same quarter (or latest FY) from:
- Bloomberg/FactSet – “wealth‑management” segment of major banks and independent firms.
- Industry research reports (e.g., Deloitte Global Wealth Management Report, PwC Wealth Management Outlook).
- Create a comparative table (as shown above) for the key metrics listed.
- Calculate and compare multiples (P/E, P/B, EV/EBITDA, price‑to‑AUM, dividend yield).
- Interpret the results relative to the sector’s average growth rate (e.g., “global wealth‑management assets are expected to grow ~6%‑8% YoY in 2025”).
- Consider macro‑factors – interest‑rate outlook, regulatory changes (e.g., fiduciary rules), and competitive pressure from fintech‑driven platforms.
5️⃣ Quick Take‑Away (based on what we do know)
- Performance – The news only tells us that Brookfield reported Q2 results and a stock split. No numeric data is available, so we cannot judge if its revenue, earnings, or AUM grew faster or slower than peers.
- Valuation – The 3‑for‑2 split is a neutral capital‑structure event; it does not affect underlying valuation. The actual market valuation (e.g., P/E, P/B) cannot be derived without the price and earnings numbers.
- What’s missing – Revenue, net profit, EPS, AUM, margin, cash‑flow, and valuation multiples—essential for a peer‑analysis.
- What to do – Obtain the detailed Q2 earnings release and compile the same data for peer companies, then apply the framework above to determine whether Brookfield is over‑, fairly, or under‑valued relative to its wealth‑management peers.
TL;DR
The press release alone does not provide the quantitative performance or valuation data needed to compare Brookfield Wealth Solutions to its peers. To conduct a meaningful analysis, you must obtain the detailed financial results (revenue, earnings, AUM growth, margins, cash flow, etc.) and calculate key multiples (P/E, P/B, EV/EBITDA, price‑to‑AUM, dividend yield). Once you have those numbers, you can place Brookfield’s performance and valuation side‑by‑side with comparable wealth‑management and financial‑services firms. The announced 3‑for‑2 stock split is an accounting change only—it does not affect the underlying performance or valuation. Once the numbers are in, use the comparative framework provided above to reach a definitive answer.