Q1 earnings and dividend decision put Brookfield Business Partners (NYSE:BBU) in focus

Brookfield Business Partners (NYSE:BBU) is drawing attention after Brookfield Business Corporation reported first quarter 2026 results with lower sales and net income, alongside a fresh quarterly dividend declaration.

For the quarter ended March 31, 2026, Brookfield Business Corporation reported sales of US$6,436 million, compared with US$6,749 million a year earlier, and net income of US$40 million, compared with US$80 million previously.

The latest quarterly results and dividend update come after a softer patch for the stock, with the share price down 9.21% over the past month and 12.20% year to date. However, the 1 year total shareholder return of 30.82% and 3 year total shareholder return of 87.45% point to longer term momentum that has so far remained positive.

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With the stock down in recent months but still showing strong multi year total returns and trading below analyst price targets and some intrinsic value estimates, investors may need to consider whether there is a buying opportunity or whether the market is already pricing in future growth.

Price to sales of 0.2x, is it justified?

On Simply Wall St's preferred metric, Brookfield Business Partners is valued at a P/S of 0.2x, which screens as inexpensive compared with both peers and the broader Industrials sector.

The P/S ratio compares the company’s market value to the revenue it generates, so a lower multiple can indicate the market is assigning a relatively modest value to each dollar of sales. For an investor, that raises the question of whether current expectations for revenue and profitability are conservative or if the low multiple reflects the current loss making position and recent revenue decline.

Against the global Industrials industry average P/S of 0.8x and a peer average of 1.9x, Brookfield Business Partners is trading at a steep discount. Relative to the estimated fair P/S of 0.2x, the current multiple lines up closely with where regression analysis suggests the ratio could level out, which implies the market may already be pricing the stock near that fair ratio.

Result: Price-to-sales of 0.2x (UNDERVALUED)

However, there are clear risks to keep in mind, including a 38.79% decline in annual revenue growth and the company reporting a net loss of US$26 million.

Another view on valuation

While the current P/S of 0.2x looks cheap against Industrials peers, Simply Wall St's DCF model paints a different picture. On this approach, Brookfield Business Partners at $31.46 is trading well below an estimated future cash flow value of $109.73. This also points to an undervalued stock. The key question is whether those cash flow assumptions prove realistic.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Brookfield Business Partners for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 49 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

Given the mixed signals around valuation, recent performance and the balance of risks and rewards, it makes sense to review the data directly and decide where you stand. To quickly weigh up the trade off between potential upside and the issues investors are watching, start by checking the 1 key reward and 3 important warning signs.

Looking for more investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.