Power Corp (POW.TO)

This is a solid company that has good businesses, but it has been dead money for a decade or longer. It is a conglomerate that is driven by Great West Life. Mutual fund companies are suffering from increased disclosure and pressure to reduce fees. He thinks Great West Life is a fine insurer but would much prefer to own Manulife or Sun Life than Power Corp because he thinks they represent better value and have better prospects for growth of earnings and dividends.

This is a solid company and dividend payer, but the stock prices has done nothing for a very long period of time. Two of the entities largest holdings are Investors Group and Great West Life. The mutual fund side is going through tough fee compression. He would not invest new capital here.

He has not had it in his portfolio for the last 5 years. It has not taken off. It might be a good opportunity now but he is not looking at it.

This is a family-owned empire. Control has changed and they have cut loose their newspaper and are talking about doing interesting new things with their assets, including consolidating their European assets which valued at $0 by the street. The stock trades at about 80% of its net asset value. It is inexpensive in absolute terms and in comparison to its historical valuation, and poised for growth. Rising bond yields will boost their earnings of the Power Financial companies. The dividend yield is high, with very little risk. (Analysts' price target is $33.69)

POW and PWF: Recent reports were in-line. Not exciting stocks in the financial sector. The dividends are attractive, but don't expect huge upside on the share price.

Power Corp (POW-T) vs Power Financial (PWF-T). He owns Power Financial. Power Corp is the parent. It has been a disappointing stock. PWF owns Great West Life (GWO-T) and IGM-T and a European investment company. GWO has been the drag on Power Financial due to a poor acquisition of a US investment company and some poor European investments. He still owns Power Financial and hopes they will return to twice yearly dividend increases (which stopped following the financial crisis). Yield 4.98%.

Power Corp vs Power Corp Preferred Shares. The preferreds are yielding a similar value (near 5%). However, you can benefit from rising dividends with the common stock, which had previously been increasing twice a year prior to the financial crisis. Yield 4.98%

She holds Power Financial, which is part of the same family. She thinks the dividend, around 4%, is very safe. Looking at the underlying businesses, Great West Life has performed well but Investors’ Group is going through a change with move to ETFs. POW is working through this. It generally trades at a discount to the net asset value of its underlying companies. The discount is now around 19% compared to a typical level of 10%. This indicates that the market would rather own the underlying companies directly rather than through a large conglomerate.

Waiting for Desmarais kids to do something transformative with their father's business. Growing impatient with them, but still own it.

Over the last number of years, this has traded in this range, and hasn't moved a whole a lot. The bulk of this is coming from Power Financial, which is their exposure to Great West Life (GWO-T) and Investors Group. They have other interests as well. From a dividend point of view this is a safe stock to own. You are going to lose a whole lot of money by owning this company, but in terms of upside, they have not shown that they have been able to generate any sort of catalytic reason for the stock to accelerate. Dividend yield of 4.5%.

Feels the problem over the last decade or so, is that they used to sit on cash and then jump at opportunities, but haven't really been jumping at acquisitions recently. There hasn't been any growth in the mutual fund industry or even at Great West (GWO-T). In 2009, the dividend was at $1.40, and stayed at that until 2015 when they raised its to $1.49. The average growth rate of the dividend over the last 5 and 10 years has only been 5%. He would avoid this.

Has minimal exposure to this. A 4%+ dividend is a fairly attractive place to have some money parked. Doesn't see any significant downside.

Cash, Power Financial (PWF-T) or Power Corp. (POW-T)? These are very different propositions. It depends on what else you own in your portfolio. Power would not be his pick of where to go in the financial space. Having cash at this point makes sense. Given how much markets have run up, you have to have a mechanism of being able to play some defence, so Cash would be his first pick at of these choices.

Most people value this on a NAV basis, which means you take its ownership in Power Financial (PFC-T) and come up with a NAV. The reason to stick around is that it has always traded at a discount to NAV, and continues to trade at a deep discount to NAV. In the meantime, you get a big dividend. A good anchor for your portfolio. If looking for a non-bank investment, this one is good. 4.3% dividend.

(A Top Pick Oct 13/16. Up 21%.) His thesis is that the basic business is okay, and Paul Desmarais’s sons would reinvigorate the company after his death. He was wrong. No catalyst has emerged. However, prospects for insurance companies have improved somewhat, as interest rates have come up.