Power Financial Corp (PWF.TO)

(Top Pick May 2/16, Up 12%) It owns Great West Life, IGM (Mutual Finds) and a holder of European firms. It has more of an exposure to Europe than the other guys. CRM-2 with more discloser was thought to hurt them, but did not.

This should map pretty closely with Great West Life (GWO-T), as what most people are looking at in this company is the Great West component. He would still prefer owning this as opposed to just a pure play in Great West Life, not only because of diversification, but increases in dividends. Dividend yield of 4.5%.

He likes financials. This one has a very nice dividend and is very defensive. It should benefit with slightly higher interest rates and a better stock market with their underlying holdings. He models a 9% EPS growth over the next couple of years. Dividend yield of 4.8%. (Analysts’ price target is $37.00.)

Preferred Shares. This would be one of the stronger preferreds he would be quite comfortable with. It’s a great issue to own. Relative to the rest of the market, it has a very big coupon of 5.9%, compared to the general run of the market of about 5%. This issue weathered the storm much better than the rest of the market over the last few years. It is trading at a significant premium to the $25 par value.

If you don’t like the way they allocate money, you can move to POW-T. He sees a bit of a rally in PWF-T so play it out. If it gets up to highs, you might trim it back. There is nothing wrong with the decent yield.

They own an insurance company and a mutual fund company. Both have good yields. They should benefit from rising interest rates. All together it is so cheap that you have to tuck it away and enjoy the dividend while you wait for a nice big gain. (Analysts’ target: $35.00).

(A Top Pick Nov 27/15. Up 6.07%.) This is a laggard in the Canadian financials. Its biggest assets are Great West Life and Investors Group. The drag on the stock has really been Great West Life, where a lot of its business is in England and Europe. As interest rates are going up, it is starting to perform.

Reporting in a short while, and is not seen anything to get too excited about, or what the catalyst is besides higher rates. Not his favourite space. In pure insurance, he would be looking at a Sun Life (SLF-T) or Canadian Banks. Mutual fund companies are having a real tough go and are facing more redemptions, and will probably continue to do so.

Prefers Power Corp. (POW-T) as you get more assets, and is trading at a deeper discount than this. If you own one or the other, he would just Hold. The company is completely misunderstood by the market. At some point insurance assets are going to get a re-rating and a better market value. There is potential for the stock to go higher as it is mispriced right now. 5% dividend yield.

Power has Investors Group and Great West Life. Power Corp. has some businesses in Europe.

A well-run company. If you have a very long time horizon, it is probably a good one to own. A cautionary note would be on their exposure to the asset management business, the mutual fund business in particular, which is going to come under increasing pressure over time.

A very diversified financial company. This would almost be in the “forever hold” category. ROE is in the low teens, below what he would look for. A very, very consistent company. Dividend yield of 5%. He doesn’t own any financial companies right now, but if you want to own a financial, this would be a good one.

(A Top Pick Oct 20/15. Up 2.45%.) One of those stocks that is cheap, but the response has been “So what?”, which has generally been the response, not only to this company, but a lot of high-value stocks. It is still good value and has a nice yield.

Has liked this in the past, but is not as enthused at this point in time. The dividend is safe. However, they have a lot of mutual fund assets in their portfolio, and he really thinks that ETF’s are the death knell for mutual funds.

Just bought this in both his dividend and Canadian equity funds. Although rates are going to gradually move higher, the insurance companies will benefit more than the banks, and people with US assets will benefit more. Pays a nice dividend yield.