Power Corp (POW.TO)

Great West Life and Investors Group are the two main assets of Power Corp and Power Financial. He likes both. 15-20% of POW-T’s assets are different than PWF-T’s. Likes both of them. POW-T is perhaps a little more diversified. They have a very good dividend that is very defendable. They both trade at a discount to NAV. For a long term hold, this is a great stock to just clip the coupon and it should grow 5-8% in terms of earnings growth.

Nobody has made any money in this company for a long time. Part of that is the malaise affecting the insurance industry. With very low bond yields, insurance companies can’t really invest their unearned premiums and make very much money. That is about to change. Bond yields are going to start going up in about a year from now, which is excellent for insurance companies. With the demise of Paul Demaray, the control block of this company is, at least notionally, in play. If they break it up, the parts are worth more than Power Corp. Also, Investors Group is increasing assets under management, which will increase the cash flow going upstream.

This gives you a pretty diversified mix. He would probably go more directly to some of the insurers. This is in the financial space, but he would rather buy Manulife (MFC-T) or Great West Life (GWO-T) directly. That is where the leverage is and that’s where you will get returns within the financial sector. This will give you a pretty decent dividend of 3.6%, but you can get that with Sun Life (SLF-T).

Power Financial (PWF-T) versus Power Corp. (POW-T)? Power Corp. is a holding company, so it is always going to trade at a slight discount. If you really want upside, you should just own the underlying assets. Conglomerates tend to trade at a discount because people are not going to give you full value for all the assets you own. Owning either of these will do well for you.

With the umbrella group as opposed to one of the divisions, you get a bunch of other assets for free. You get a bunch from Europe, printing and publishing assets. Stock markets are at all-time highs, which is good for the mutual fund business. Looks like interest rates are going to go up, which is good for the insurance business. They haven’t raised their dividend in a long time, and thinks this is this year or early next year. You are paying 10X earnings based on forward growth. Yield of 3.85%.

Thinks this will be a market performer. Nothing wrong with this. Well managed. 3.9% yield is safe.

If over the next 3-6 months we correct, then this will be between $27+28. Wait until the correction is over. Then this will be a good name to own.

Hasn’t looked at this lately and whether it is a Buy or Sell would depend on your time frame. If you get it in the high $20’s you will probably do all right. Reasonable dividend yield. Has had good growth. Does well out of Europe coming back.

Held Power Financial in the past. The family that holds it wants the dividend. Go lower down and hold either a bank, or Investors Group. This one is more defensive.

Loves the components, such as IGM. In wealth management you are either a bank or you are an independent that has some form of captive distribution, which this one does. Almost 4% yield. Will benefit from the strong backdrop in equity markets. 3.9% dividend.

(A Top Pick September 7/12. Up 27.39%.) Still likes. If you own, continue to Hold.

Power companies are some of the best managed companies in Canada. This one has European assets that he doesn’t think are really valued in the pricing. Expect there will be a dividend increase sometime in the future. His focus has been on Power Financial (PWF-T). (See Top Picks.)

Power Financial (PWF-T) versus Power Corp (POW-T)? He would probably choose Power Financial because it holds more things. Charts tend to be the same. Yield of 3.85%.

(Market Call Minute.) The operating subs are doing well.

(A Top Pick Sept 7/12. Up 20.64%.) Sold his holdings at $27 for a 13% gain plus the 5% yield.