I first bought this stock (TSX-PWF) in 2001 and then some more in 2004. My total return has been 8.14% per year. The dividend portion of this total return would around 4%. This company used to have a good record of increasing it dividend each year and it used to be on the dividend lists that I follow. They were taken off the dividend lists because dividends have not been raised since 2009.
When I looked at the Insider Trading report, I find that there is some $12.2M of net selling that seems to be all from one director. The director still has substantial shares in this company. When insiders buy, you know because they feel good about the future of a company. However, insider selling can be done for a lot of reasons, and the most common is that money is needed. Institutions own 11.8% of this company. In the last 3 months, there has been a net of 8 new buys and a net of just over 10M shares bought, by institutions.
When I look at the 5 year Median Price/Earnings ratios, I get a low of 11.9 and a high of 16. The current P/E Ratio of 12.14 is close to the low P/E Ratio above and better than average. I get a Graham Price of $30.14, so the current price of $31.33 is just 4% above this. The 10 year median difference between the Graham Price and the stock price ranges from 0% to 35%. So again, this shows a better than average current stock price.
The 10 year median Price/Book Value Ratio is 2.50 and the current P/B Ratio is 2.00. This makes the current ratio just 80% of the 10 year median ratio and points to a good current stock price. Because some analysts are now referring to the Price/Sales (or Price/Revenue) Ratios, I will mention this ratio also. I have a 10 year average P/S Ratio of 0.82 and a current one of 0.62. This also shows a good current price.
The 5 year median yield is 4.3% and the current one is higher at 4.5%. This also points to a good current stock price. This might be surprising since the dividend has not changed since 2009. The thing is that the current stock price is the same or lower than the stock price was from 2005 to 2007. As far as my dividend yield on my original cost of this stock, the stock I bought in 2001 is currently earning 7.4% and the stock I bought in 2004 is earnings 4.7%.
It is hard to know what the dividend growth potential of this stock is. In good times, this stock increased its dividends around 20%. It is hard to know when they will again raise dividends, but the current Payout Ratio on Earnings for 2011 is expected to be 54% and the Payout on Cash Flow is expected to be 16%. The Payout on Cash Flow is good, but when this company was raising dividends before, the Payout Ratio on Earnings was below 40%. One analyst thought there might be a small raise this year.
When I look at analysts recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus recommendation would be a Buy. (See my site for information on analyst ratings.) Analyst talk about this stock being a low risk and that it is attractively priced. Most analysts expect that that total return will be very decent for this stock in 2011.
I think that this has been a good investment for me and I will continue to hold my shares. I will not be buying any more as I have enough of my portfolio invested in the insurance and financial sectors.
I note that the Passive Income Earner blogger has recently written about this company.
I have sold some of my Shoppers Drug Mart (TSX-SC) stock and bought some Calian Technologies Ltd (TSX-CTY) stock. I had thought of buying both Calian and Enghouse Systems (TSX-ESL) as they both are good stocks. The concern was over diversification or having too many stocks in my portfolio, so I decided to just pick one of these good stocks to buy.
This company is a holding and management company. Its operations provide a range of individual and corporate financial and fiduciary services in North America and Europe. It holds interest in the following companies: Great-West Lifeco, Great-West Life, London Life, Canada Life, Great-West Life & Annuity, Putnam Investments, IGM Financial, Investors Group Mackenzie Financial, and Pargesa Group. Controlling shareholder of Power Corp of Canada is Paul Desmarais. They have 30.1%, but have 64.6% voting control. Its web site is here Power Financial. See my spreadsheet at pwf.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 for stocks followed and investment notes. Follow me on twitter.
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