The Panic-Proof Portfolio (Stockchase Research) GWO Preferred Shares 5.4% Perpetual GWO.PR.P-T TOP PICK Jul 04, 2024

GWO is a well-diversified lifeco.  The company’s latest quarterly earnings showed cash reserves growing, while debt is retired and shares bought back.  The company trades at 1.5x book value.  This preferred share pays a perpetual quarterly dividend that has a great yield and high (Pfd-2H) credit rating.  Rising interest rates have reduced the preferred share value to a discount of its $25 par value; however, when interest rates return to long term levels this can provide possible upside potential of 22%.  We recommend placing a stop-loss at $17.25.  Yield 6.5%

We reiterate GWO.PR.P as a TOP PICK.  GWO is a well-diversified lifeco.  The company’s latest quarterly earnings showed cash reserves growing, while debt is retired and shares bought back.  The company trades at 1.5x book value.  This preferred share pays a perpetual quarterly dividend that has a great yield and high (Pfd-2H) credit rating.  Rising interest rates have reduced the preferred share value to a discount of its $25 par value; however, as interest rates stall and eventually return to lower long term levels this can provide possible upside potential over 20%.  We continue to recommend a stop at $17.25.  Yield 6.5%

We reiterate this Canadian based preferred share offering by Power Financial.  The parent company POW recently reported EPS increasing by 138%.  Cash reserves at the parent are growing, while debt is retired and shares bought back and their stock trades at 10x earnings and 2x book value.  We continue recommend trailing up the stop (from $17.50) to $19.00, looking to achieve $25.00 -- upside potential of 17%.  Yield 6.3%