Power Corp (POW.TO)

It has industries under them that he is not that keen on, but he holds it because of an expected shakeup to release value upon the death of one of the principles.

The bulk of this company is their investment in Power Financial (PWF-T). You could look at either one of these, but today with Power Financial you are getting a little bit of a premium in the yield. For longer-term investors, they are going to see dividend increases in both companies. Of the 2, he would prefer Power Financial which has a yield of 5.2% versus 4.8%.

A good company. Extremely well-managed. Has a lot of engines of growth. Relatively inexpensive and generally overlooked within the market. Trading at 10.5X forward earnings. About 4.75% dividend yield. Financials offer tremendous value. He can see 10%-12% upside in the next 8-10 months.

The sum of the parts is worth more than the stock. It is trading at about a 20% discount to NAV. Whenever you can buy a loonie for $.80, you should, particularly when you are getting a nice dividend. He likes the dividend of almost 5%.

His model price is $40.85, a 42% upside. The market doesn’t quite believe this company’s balance sheet. Pays 4.66% dividend yield. He would have some in your Canadian portfolio.

(Market Call Minute.) The mutual fund business is under pressure which is going to translate into earnings.

This hasn’t worked out so far. Lower interest rates have obviously pressured Great West Life (GWO-T). You have sloppy markets and regulatory pressures that have clouded the outlook for Investors Group. What is really good is that you are going to get paid your 5% dividend and he sees it growing at 6%. Sees growth returning at about 9% next year. Valuation is very cheap at around 10X 2016 versus 11X the 5-year average. This is one you want to be picking away at while it is unloved. A good way of doing that is by selling Puts a few times a year.

He is not crazy about mutual fund companies in Canada because of increasing fee disclosure requirements coming.

If you are looking for a safe investment, okay. But do you want Investors Group or Great West Life. They are sitting on a lot of cash and have done so for a long time. What will make it go higher?

He wants growth AND dividend and without both he does not have anything encouraging to say. CRM2 is going to cause them to divulge ALL their fees, coming out this spring or summer. Now people are really going to find out how much they are paying for their mutual funds. You should get some sideways move in the stock price.

Trading at around 10X earnings, so it is not expensive. Has a reasonable dividend. However, it doesn’t look like it has any earnings momentum. It is probably going to sit, doing very little at this point. You are probably in a sideways market unless they can do something to rejuvenate the earnings and get them going up, so you are probably sitting with dead money. Dividend yield of 4.2%.

(Market Call Minute.) Prefers Power Financial (PWF-T) slightly, but both of them now have discounts that are abnormally large, and they are both Buys.

It has been underperforming for several months. It is unclear if these things will lead coming out of this correction. He would prefer a company that would benefit more from a strong US economy.

She holds PWF-T instead. POW-T is a holding company so you can’t look at it on a multiple basis. Usually it trades at a discount to NAV, but the discount is now quite wide. They have solid operations. A decent long term hold and an attractive yield.

Power Corp. (POW-T) or Power Financial (PWF-T)? Doesn’t like either. Power Corp. owns Power Financial, but at the end of the day, you really own Power Financial as that is the only asset that is in there. The underlying assets of Investors Group and Mackenzie Financial are a bit of a challenged market going forward. He would prefer owning just Great West Life (GWO-T) which is part of Power Corp. also.