Power Corp

I am reviewing this stock (TSX-POW) today as I have updated my spreadsheet because of its 2008 annual report. I do not own this stock, as I have Power Financial Corp stock. This stock is on everyone lists. It is on the Dividend Achievers list at www.dividendachievers.com, and the Dividend Aristocrats list at www.tmxmoney.com/en/individual.html (see indices) and also on Mike Higgs’ list. Please note that Mike Higgs’ has discontinued his list.

This stock has had great growth in Revenues, Dividends, Cash Flow and Book Value over the last 5 and 10 years. There is a good reason for this stock being on everyone list as it is a good dividend payer. The dividend growth for the last 5 and 10 years is around 18% for both periods. The yield also is not bad at around 2%. If you had held this stock for the 5 or 10 years to 2008, yield on initial investment would be around 5.3% and 7.5% respectively.

The earnings and the stock price fell quite substantially in 2008. After the earnings came in lower for the year ending in December 2008, earnings for 2009 were revised down. However, most analysts expect the earnings will rise again in 2010. The earning and stock price hit are not surprising given that we are in a recession.

As far as the Asset/Liability Ratio goes, it is rather low at 1.20. However, this company is mostly financial and this ratio is lower for financial companies and banks. This company did not have a great year for Return on Equity either as this came in at only 7%. However, the 5 year average was 13% and this company has usually managed a ROE around 15% in the past. The other thing to look at is the Accrual Ratio and this is not bad at .05%.

As I have said, I can see why this stock is on everyone list. It pays good dividends and it has steadily increased the value of the company. You can see this reflected in the growth over time of the Graham Price. I am going on a road trip tomorrow, so I will not be publishing my blog, but on Friday, I will take a look at what the analysts are saying about this stock currently.

This company is an international management and holding company. It has as subsidiaries Power Financial Corp., Power Technology Investment Corp. and Gesca Ltee. Subsidiaries of Power Financial include Great-West Lifeco, IGM Financial, London Insurance Group, Canada Life Financial, Putnam Invest., LLC Investors Group, Mackenzie Financial Corporation, and its affiliate Pargesa Holding SA. Its web site is www.powercorporation.com. See my spreadsheet at www.spbrunner.com/stocks/pow.htm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets.