Brookfield Business Partners: A High-Yield Buy Opportunity Amid Strategic Capital Recycling and Operational Strength

In an era of economic uncertainty and volatile markets, investors are increasingly seeking defensive plays that balance income generation with long-term capital preservation. Brookfield Business Partners (BBU) has emerged as a compelling candidate for such a strategy. With resilient cash flows, disciplined buybacks, and a robust pipeline of value-creation initiatives, BBU offers a rare combination of high yield and operational durability. Let's dissect why this Canadian-listed MLP is positioned to outperform in a challenging macroeconomic climate.

Resilient Cash Flow and Strategic Capital Recycling

Brookfield Business Partners reported second-quarter 2025 results that underscore its operational strength. Adjusted EBITDA rose to $591 million, a 13% year-over-year increase, driven by its Industrials segment and the integration of recent acquisitions. Notably, the company's capital recycling efforts have been a cornerstone of its strategy. In Q2 alone, BBU sold a partial interest in three businesses to Brookfield Asset Management's new evergreen private equity fund, securing $690 million in return for units at an 8.6% discount to NAV. These units are expected to be redeemed for cash within 18 months, providing a liquidity tailwind.

The company's acquisition of Antylia Scientific, a life sciences and environmental lab equipment manufacturer, for $1.3 billion further illustrates its focus on high-growth, cash-generative industries. By securing a 26% stake in Antylia, BBU is poised to benefit from the growing demand for lab consumables and testing solutions, a sector insulated from macroeconomic downturns.

Accretive Buybacks and Shareholder Returns

BBU's buyback program has been a significant value driver. In Q2 2025, the company repurchased 6.5 million units for $157 million, averaging $25 per unit. These repurchases, part of a normal course issuer bid (NCIB), have reduced the float and enhanced earnings per unit (EPU) for remaining shareholders. Given BBU's strong liquidity position—$2.9 billion in pro forma liquidity post-announced transactions—the company has ample capacity to continue its buyback program, even as it funds new acquisitions.

The current dividend yield, calculated using the average repurchase price of $25 per unit, stands at 1% (annualized dividend of $0.25 per unit). While this yield may appear modest compared to traditional high-yield sectors like utilities, BBU's ability to compound value through buybacks and strategic reinvestment makes it a more sustainable income play.

Defensive Characteristics in a Volatile Environment

BBU's business model is inherently defensive. Its portfolio spans industrials, business services, and infrastructure—sectors that remain in demand regardless of economic cycles. For example, the Business Services segment generated $205 million in Adjusted EBITDA in Q2 2025, demonstrating resilience despite the sale of a prior-year operation. Meanwhile, the Infrastructure Services segment, though down year-over-year due to the divestiture of its offshore oil services shuttle tanker business, remains a critical source of stable cash flows.

The company's recent partnership to privatize First National Financial Corporation, a Canadian mortgage lender, for $2.7 billion, further diversifies its revenue streams. BBU's 11% stake in this venture positions it to capitalize on the long-term growth of residential and multi-family housing, a sector supported by demographic trends and urbanization.

Why BBU Is a High-Yield Buy Now

With a forward yield of 1% and a history of compounding growth through buybacks and accretive acquisitions, BBU offers a unique value proposition for income-focused investors. The company's disciplined capital allocation—prioritizing returns on invested capital over short-term gains—ensures that its yield remains resilient. Additionally, its strong balance sheet (with $2.9 billion in liquidity) provides a buffer against economic headwinds, making it a safer bet than many high-yield alternatives.

Investors should also consider BBU's alignment with long-term secular trends. The shift toward clean energy, the rise of life sciences, and the demand for infrastructure services are all tailwinds that BBU is strategically positioned to exploit. Its recent acquisition of Antylia Scientific and expansion into energy storage exemplify this forward-looking approach.

Conclusion: A Defensive High-Yield Play

Brookfield Business Partners is more than a high-yield name—it's a masterclass in capital recycling and operational execution. By leveraging its liquidity, strategic acquisitions, and disciplined buyback program, BBU has created a self-reinforcing cycle of value creation. For investors seeking a defensive income play in a volatile market, BBU offers a compelling combination of yield, growth, and downside protection.

Investment Takeaway: Buy BBU for its resilient cash flows, accretive buybacks, and strategic positioning in high-growth sectors. Hold for the long term to benefit from compounding returns and a sustainable yield.