Power Financial Corp

PWF-T

They recently bought back 5-8% of shares outstanding. It's a good income stock at a 5.9% dividend. PWF's performance depends on its subsidiaries, though it trades at an historially wide 19% discount to those subs. Maybe the subs have better growth. It's a safe defensive stock.

Both the Power companies have broken out of their trading range. PWF-T holds Investors Group and other investment management and insurance companies that are well positioned. The Lifecos under their management are being rolled under one name. This may bring a surge in investor interest. He looks to see which is selling at a larger discount to NAV -- right now favoring PWF-T.

They did a branding exercise to put all their insurance under one brand. A well-wun company. Just bought back a lot of shares, which is a good sign. They rebounded well after their lows, so it's no surprise the stock has slightly pulled back now. It's a good long-term hold for the dividend.

Insurance in a portfolio? He sold their Power Financial holding last year. Following the banking crisis it just has not recovered. It owns GreatWest Life and IGM -- neither has done well. Insurance is a better bet than banks, he thinks. He would prefer SLF-T in Canada and AFG-N in the US.

PWF bought three separate companies--Investors Group, Great-West Life and London Life--and will do now synergize them, which is a good thing. It'll take a few years, but this will reduce overhead and costs and let them compete better with MFC and SLF.

PWF is holding a Dutch auction--what is that? A few Power stocks are doing this. It's like they're buying stock--if you don't want to keep holding your shares, you an tender them. PWF itself pays a good yield, but the Power stocks haven't done much which is why they are doing this auction. You're selling your shares back to the company, but you may not get your full, desired price. PWF is a good income stock.

It is a well established business. It is diversified. There is the wealth management business. The dividend is safe. The broad mutual fund business is under pressure. Buy it for yield but not for growth. See Canadian banks.

They have an emerging robo-advisor business among their other businesses, GWL and Investors Group which are sluggish growers. Unless something macro in the insurance space (interest rate hikes) or an acquisition happens, PWF will simply grind along. Mutual funds are stagnating or declining (Investors Group charges very high fees). Safe dividend, but he doesn't see much capital appreciation here.

The Power franchise has had some challenges. The dividend is safe and management knows they need to make some changes. The Investor's Group side is under competitive pressure. With a couple of moves the company value could increase sharply. He would continue to hold. Yield 6%.

POW-T vs. PWF-T. Great West Life is the underlying company that supports both of these stocks. They are basically the same price. POW-T trades at a discount to GWO-T. You need to believe in GWO-T to own these two companies.

Pays a good dividend. Their underlying business insurance and investments, which have been under pressure, though good long-term. Stable long-term stock, but there will be short-term challenges. Averaging down isn't a bad idea.

Some people put more of a premium on Power Corp than Power Financial. Longer term, Great West Life is probably a sustainable investment. Mutual funds are under increasing competition. He leans slightly toward Power Corp, but Power Financial has a slightly enhanced dividend. Both dividends are well covered. Future dividend hikes will depend on how they position themselves going forward, and this will take time to show up.

PWF-T vs. POW-T. The parent vs. the subsidiary. He would go to PWF-T. We saw a bit of a pull back. He prefers the banking sector even more than these. He would not step into either one.

They have insurance and investment groups with assets into Europe as well. He likes their yield over 6%. He is interested in this again. With the recent pullback, there is now less risk.