Operating Margin - Brookfield Business Partners LP (TSX:BBU.UN)

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Price: 49.48 CAD 3.54%

Market Cap: 6.9B CAD

14.6%

Current

Average

7.9%

Industry

Operating Margin represents how efficiently a company is able to generate profit through its core operations.

Higher ratios are generally better, illustrating the company is efficient in its operations and is good at turning sales into profits.

Operating Margin

14.6%

Operating Profit

4.1B

Revenue

27.8B

Operating Margin Across Competitors

Country		Company	Market Cap	Operating Margin
BM		Brookfield Business Partners LP TSX:BBU.UN	6.9B CAD	15%
US		General Electric Co NYSE:GE	324B USD	18%
DE		Siemens AG XETRA:SIE	184.1B EUR	12%
JP		Hitachi Ltd TSE:6501	22.3T JPY	11%
US		Honeywell International Inc NASDAQ:HON	126.4B USD	20%
US		3M Co NYSE:MMM	86B USD	21%
ZA	B	Bidvest Group Ltd JSE:BVT	78.7B Zac	9%
US	R	Roper Technologies Inc F:ROP	41.2B EUR	28%
CN		CITIC Ltd HKEX:267	356.1B HKD	0%
KR		Samsung C&T Corp KRX:028260	40.7T KRW	8%
MY	W	Warisan TC Holdings Bhd KLSE:WARISAN	112.1B MYR	-3%

Brookfield Business Partners LP
Glance View

Economic Moat

None

Market Cap

6.9B CAD

Industry

Industrial Conglomerates

Brookfield Business Partners LP operates like a masterful storyteller, weaving together the threads of diverse industries into a cohesive narrative of growth and value. As the publicly traded arm of Brookfield Asset Management, it seeks out businesses that are often unloved or overlooked, focusing primarily on sectors where it can leverage its vast experience and capital. Its business model is essentially a mosaic of buy, improve, and hold—snapping up companies or business units that show promise but lack the resources or strategic vision to reach their potential. With a keen eye for value, Brookfield identifies opportunities in industries ranging from infrastructure to energy to industrials. Once acquired, these entities are carefully nurtured, streamlined for operational efficiency, and positioned for long-term success. The revenue ticking within Brookfield Business Partners is a testament to its disciplined approach. This is not a company that merely flips assets for tidy short-term gains—rather, it is a patient cultivator of long-term value. By implementing its operational know-how and financial acumen, Brookfield enhances the earnings output of its acquisitions, generating steady streams of cash flow. This cash flow can be reinvested in the existing portfolio or in new acquisitions, perpetuating a cycle of growth. This cyclical approach not only provides robust returns to its investors but also ensures that the companies under Brookfield’s wing are poised to thrive sustainably. Brookfield Business Partners acts as both shepherd and steward, guiding its diverse holdings toward a prosperous future, while skillfully navigating the complexities of global markets.

View BBU.UN Analysis

BBU.UN Intrinsic Value

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

The AI Assistant may sometimes provide inaccurate information.

Make your own investment decisions or consult a licensed financial advisor.

US	Johnson & Johnson NYSE:JNJ	Pharmaceuticals
US	Berkshire Hathaway Inc NYSE:BRK.A	Financial Services
US	Bank of America Corp NYSE:BAC	Banking
US	Mastercard Inc NYSE:MA	Technology
US	UnitedHealth Group Inc NYSE:UNH	Health Care
US	Exxon Mobil Corp NYSE:XOM	Energy
US	Pfizer Inc NYSE:PFE	Pharmaceuticals
US	Palantir Technologies Inc NYSE:PLTR	Technology
US	Nike Inc NYSE:NKE	Textiles, Apparel & Luxury Goods
US	Visa Inc NYSE:V	Technology
CN	Alibaba Group Holding Ltd NYSE:BABA	Retail
US	JPMorgan Chase & Co NYSE:JPM	Banking
US	Coca-Cola Co NYSE:KO	Beverages
US	Walmart Inc NYSE:WMT	Retail
US	Verizon Communications Inc NYSE:VZ	Telecommunication
US	Chevron Corp NYSE:CVX	Energy

	Johnson & Johnson NYSE:JNJ	206.37 USD -0.93%
	Berkshire Hathaway Inc NYSE:BRK.A	745 600 USD -1.34%
	Bank of America Corp NYSE:BAC	55.27 USD 1.86%
	Mastercard Inc NYSE:MA	572.23 USD 1.06%
	UnitedHealth Group Inc NYSE:UNH	327.42 USD -0.22%
	Exxon Mobil Corp NYSE:XOM	116.69 USD 0.13%

	Franklin Covey Co NYSE:FC	16.88 USD -0.53%
	Mohawk Industries Inc NYSE:MHK	107.88 USD -1.47%
	Ardmore Shipping Corp NYSE:ASC	10.89 USD 0.37%
	ASGN Inc NYSE:ASGN	48.8 USD -0.51%
	Skyworks Solutions Inc NASDAQ:SWKS	64.68 USD 0.29%
	Weatherford International PLC NASDAQ:WFRD	78.83 USD 2.38%

	Johnson & Johnson NYSE:JNJ	206.37 USD -0.93%
	Bank of America Corp NYSE:BAC	55.27 USD 1.86%
	Mastercard Inc NYSE:MA	572.23 USD 1.06%
	Salesforce Inc NYSE:CRM	259.91 USD 0.8%
	Abbvie Inc NYSE:ABBV	226.82 USD 1.8%
	Home Depot Inc NYSE:HD	345 USD -2.81%

	Monolithic Power Systems Inc NASDAQ:MPWR	937.11 USD 0.82%
	Applovin Corp NASDAQ:APP	721.37 USD 3.89%
	NVIDIA Corp NASDAQ:NVDA	180.99 USD 3.93%
	Cal-Maine Foods Inc NASDAQ:CALM	85.7 USD -0.43%
	Pro Medicus Ltd ASX:PME	217.37 AUD 1.17%
	Lundin Gold Inc TSX:LUG	113.69 CAD -1.01%

Brookfield Business Partners LP
TSX:BBU.UN