A Canadian Dividend Stock Down 25% to Buy Forever

The Canadian stock market has delivered solid gains in recent months, supported by strong performances from energy producers, basic materials companies, and businesses benefiting from the artificial intelligence (AI) boom. As a result, many of the leading TSX stocks are trading near their highs, leaving investors with fewer obvious bargains.

However, a few fundamentally strong dividend-paying stocks have pulled back from their recent highs, creating buying opportunities for long-term investors.

Market downturns and stock-specific pullbacks can often work in an investor’s favour. When the share price of a high-quality dividend stock declines, its dividend yield typically rises, allowing investors to secure higher income per dollar invested. At the same time, buying during periods of weakness can enhance long-term returns as the company recovers and resumes its growth trajectory.

Against this background, here is a Canadian dividend stock down 25% to buy forever.  

A top Canadian dividend stock trading at a discount

Income investors seeking a high-quality dividend stock at a discount could consider Brookfield Asset Management (TSX:BAM). Brookfield shares are trading about 25% below their 52-week high, creating an attractive entry point for long-term investors. Moreover, the stock currently offers a dividend yield of more than 4%.

Brookfield is one of the world’s largest alternative asset managers, overseeing investments across infrastructure, renewable energy, private equity, real estate, and credit. What makes the company particularly attractive is the stability of its earnings. Brookfield generates most of its income from recurring management fees related to long-term capital.

Today, virtually all of Brookfield’s distributable earnings come from fee-related revenue, which is a predictable and resilient earnings stream. In addition, more than 95% of these revenues are derived from capital managed on a long-term or perpetual basis, providing the company with visibility into future cash flows.

That stability has translated into a shareholder-friendly capital return strategy. Brookfield returns more than 90% of its distributable earnings to investors through dividends.

Looking ahead, management sees several catalysts that could drive growth. Market conditions are improving, fundraising opportunities remain strong, and deal activity is accelerating. These trends should allow Brookfield to continue raising and deploying capital at scale, supporting earnings growth in 2026 and beyond.

Reflecting its confidence in the business, Brookfield recently increased its dividend by 15%, making it a compelling income stock.

Brookfield to keep delivering solid growth

Brookfield Asset Management is off to a strong start in 2026. The company reported first-quarter fee-related earnings of $772 million, up 11% year over year, driven by strength across its real asset businesses and complementary investment strategies.

The firm’s leadership positions in infrastructure, renewable energy, real estate, and private equity augur well for growth. These sectors continue to benefit from powerful long-term demand trends, helping Brookfield generate strong investment performance while expanding its earnings base.

Brookfield also has significant dry powder available for deployment. As market opportunities emerge, the company is well-positioned to deploy capital in areas offering attractive risk-adjusted returns.

Further, it is likely to benefit from integrating Oaktree Capital’s credit platform. Overall, its disciplined investment approach, benefits from recent acquisitions, and significant capital give the firm the flexibility to capitalize on growth opportunities.

The bottom line

Brookfield Asset Management’s business model is built around managing client capital on a long-term or perpetual basis and earning recurring management fees in return. This creates predictable, durable cash flows that have historically remained resilient across market cycles.

With growing fee-related earnings, substantial capital available for investment, and exposure to some of the fastest-growing segments of the alternatives industry, Brookfield appears well-positioned to continue increasing shareholder value and supporting dividend growth over the long term.

The post A Canadian Dividend Stock Down 25% to Buy Forever appeared first on The Motley Fool Canada.

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More reading

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• Want Growth and Dividends From the Same Portfolio? These 2 Canadian Stocks Deliver Both
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• 3 TSX Superstars That Could Beat the Market in 2026: Get In Now

Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Asset Management. The Motley Fool has a disclosure policy.