Power Financial Corp (PWF.TO)

(A Top Pick June 8/12. Up 27.88%.) One of his favourites. Has held up well in the selloff of financials.

(A Top Pick May 4/12. Up 8.57%.) Good diversified company and is in relatively safe part of the market. Dividend is very well covered and very safe.

Preferred Series S. 4.8%. A perpetual and a recent new issue. Not callable and you have it until April 2018 when it is callable at $26. There is a lot of Call protection built into this.

Great to hold for the dividend. A lot of the stuff in it is driven by Great West Life. They are great managers and it is well run.

They own 68% of Great West Life (GWO-T) and 57% of Investors Group. Both of these areas, life insurance and wealth management, should benefit if he is correct that yields generally tease higher. This is also a low risk way of being involved in the sectors if it’s another false dawn for a recovery. Payout ratio is very sound. 4.93% yield.

This is effectively a conglomerate which owns Great West Life (GWO-T) so you could own Great West without owning this one.

Power Corp (POW-T) or Power Financial (PWF-T)? Likes both of them. Tends to invest in this one because of a somewhat higher dividend. Feels the dividend is very safe and the multiple is okay.

On a fundamental basis (rather than the technical basis), insurance companies have not been doing very well. Chart shows the stock has been in a negative trend with a lot of peaks and valleys. The good thing is that we are currently in a valley and one could make a case for the possibility of the stock starting another up leg..

It’s a tossup between Power Financial or Power Corp. At any one time either one could look better than the other. Over 5% yield. If you want the yield buy this one.

Common stocks or preferreds? Or should it be a bank instead? Yield is so good and the dividend payout ratio is about 58% so it is an easily achievable hurdle. Problem with the common is that he doesn’t think it goes anywhere for a while. There is softness with Great West Life (GWO-T), Investors Group, Mackenzie Financial. He would prefer the banks which are set up very nicely here with lots of growth opportunity and compelling valuations with good dividend growth.

Great West Life (GWO-T) or Power Financial (PWF-T)? He is out of this space completely. They need higher interest rates and he doesn’t see them going up anytime soon.

Good conservative management and balance sheets. Challenged by their Great West Life (GWO-T) holding. Good dividends but hard to see a lot of growth going forward.

Dividends will go up regularly because the Demarais family needs the money. The problem right now is that even though the stock market is improving, which helps Investors Group, Great West Life (GWO-T) is still a drag. European holdings are a very small part of their business.

Manulife (MFC-T) or Power Financial (PWF-T)? Big driver for these are the markets. He is cautiously optimistic and feels that in the short run, markets are okay. Low interest rates are also challenging for lifecos. Asian growth is attractive for Manulife but Asia is having some difficulties right now. Feels there are better sectors to focus on for either one.

Has been flat lately for good reason. People have been worried about lifecos in this environment but it is generally holding its own. ROE has always been better than the rest of the group. Investors Group (IGM) has certainly slowed down in this environment in terms of long-term asset sales they have been making. Also, has exposure to Pardeesa (?) in Europe, which caused some concern. Should weather this period but it is a long-term play. 5.6% dividend.