Sound bite for Twitter and StockTwits is: Dividend Growth Insurance. Results of stock price testing is that the stock price is probably reasonable. Debt Ratios are fine. The Dividend Payout Ratios (DPR) are fine. The current dividend yield is good with dividend growth low. See my spreadsheet on Power Corp of Canada.
Is it a good company at a reasonable price? I still like this company and I will continue to hold my shares. I will not be buying any more as I have enough and because I live of my dividend income, I really do not have much money to spend on buying shares. The insurance companies should do better now that interest rates are off their bottom. Insurance companies did rather poorly with the ultra-low and negative interest rates. I think this stock will continue to have some mix of capital gain and dividends for shareholders. The current stock price seems reasonable.
I own this stock of Power Corp of Canada (TSX-POW, OTC-PWCDF). I started following this stock because it was on the Dividend Achievers, the Dividend Aristocrats lists and also on Mike Higgs’ list. It is a stock that I notice has been recommended lately as good value (October 2008). I got shares in this company when in 2020 Power Corp reorganized and gave out Power Corp Shares to replace Power Financial Shares.
When I was updating my spreadsheet, I noticed that I have one fine with this stock. I bought it was Power Financial, but Power Corp reorganized in 2020 and I got my Power Financial replaced by Power Corp. I have had this stock for 22 years and have a total return of 7.52% per year with 2.69% from capital gains and 4.83% from dividends.
If you had invested in this company in December 2013, for $1,022.40 you would have bought 32 shares at $31.95 per share. In December 2023, after 10 years you would have received $505.58 in dividends. The stock would be worth $1,212.48. Your total return would have been $1,718.06. This would be a total return of 6.19% per year with 1.72% from capital gain and 4.47% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $31.95 | $1,022.40 | 32 | 10 | $505.58 | $1,212.48 | $1,718.06 |
The current dividend yield is good with dividend growth low. The current dividend yield is good (5% to 6% ranges) at 5.61%. The 5, and 10 year median dividend yields are also good at 5.42% and 5.11%. The historical median dividend yield is moderate (2% to 4% ranges) at 2.59%. The dividend growth is low (below 8% per year) at 6.6% per year over the past 5 years. The last dividend increase was in 2024 and it was for 7%. This stock is on all my dividend lists.
The Dividend Payout Ratios (DPR) are fine. The DPR for 2023 for Earnings per Share (EPS) is fine at 63% with 5 year coverage at 57%. The DPR for 2023 for Adjusted Earnings per Share (AEPS) is good at 46% with 5 year coverage at 53%. The DPR for 2023 for Cash Flow per Share (CFPS) is negative with 5 year coverage good at 7%. The DPR for 2023 for Free Cash Flow (FCF) is good at 29% with 5 year coverage at 15%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 62.73% | 57.47% |
| AEPS | 46.31% | 53.25% |
| CFPS | -120.98% | 8.62% |
| FCF | 29.96% | 15.39% |
Debt Ratios are fine. The Long Term Debt/Covering Assets Ratio for 2023 is good at 0.98 and currently at 0.94. The Liquidity Ratio for 2023 is good at 2.40 and 1.45 currently. If you added in Cash Flow after dividends, the ratios are fine at 3.08 and currently at 1.64. The Debt Ratio for 2023 is fine for this financial at 1.06 and 1.07 currently.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R+A | 0.98 | 0.94 |
| Lg Term R | 10.03 | 8.46 |
| Intang/GW | 0.86 | 0.79 |
| Liquidity | 2.40 | 1.45 |
| Liq. + CF | 3.08 | 1.64 |
| Debt Ratio | 1.06 | 1.07 |
The Total Return per year is shown below for years of 5 to 36 to the end of 2023. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2018 | 5 | 6.59% | 15.37% | 9.09% | 6.29% |
| 2013 | 10 | 5.96% | 6.19% | 1.72% | 4.47% |
| 2008 | 15 | 4.23% | 8.45% | 3.56% | 4.89% |
| 2003 | 20 | 7.71% | 6.25% | 2.27% | 3.98% |
| 1998 | 25 | 9.41% | 7.12% | 3.36% | 3.77% |
| 1993 | 30 | 11.12% | 11.72% | 6.77% | 4.95% |
| 1988 | 35 | 9.94% | 11.98% | 7.33% | 4.65% |
| 1987 | 36 | 9.65% | 10.99% | 6.79% | 4.20% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 9.67, 10.85 and 11.76. The corresponding 10 year ratios are 9.80, 10.97 and 11.85. The corresponding historical ratios are 10.55, 12.34 and 13.79. The current P/E Ratio is 8.858 based on a stock price of $40.12 and EPS estimate for 2024 of $4.53. This ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Earnings per Share Ratios are 7.33, 8.71, and 11.54. The corresponding 10 year ratios are 8.18, 9.15 and 11.04. The current ratio is 8.96 based on a stock price of $40.12 and AEPS estimate for 2024 of $4.48. The current ratio is between low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a Graham Price of $58.90. The 10-year low, median, and high median Price/Graham Price Ratios are 0.58, 0.65 and 0.75. The current ratio is 0.68 based on a stock price of $40.12. The current ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10-year median Price/Book Value per Share Ratio of 1.06. The current ratio is 1.17 based on a Book Value of $22,452M, Book Value per Share of $34.42 and a stock price of $40.12. The current ratio is 10% above the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I also have a Book Value per Share estimate for 2024 of $34.60. The 10 year median ratio is 1.06 and the BVPS estimate for 2024 implies a ratio of 1.16 based on a stock price of $42.10. The current ratio is 9.6% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10-year median Price/Cash Flow per Share Ratio of 2.17. The current ratio is 4.41 based on Cash Flow for the last 12 months of $5,933M, Cash Flow per Share of $9.10 and a stock price of $40.10. The current ratio is 103% above the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I get an historical median dividend yield of 2.59%. The current dividend yield is 5.61% based on dividends of $2.25 and a stock price of $40.10. The current dividend yield is 116% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median dividend yield of 5.11%. The current dividend yield is 5.61% based on dividends of $2.25 and a stock price of $40.10. The current dividend yield is 9.7% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.
The 10-year median Price/Sales (Revenue) Ratio is 0.33. The current P/S Ratio is 0.37 based on Revenue estimate for 2024 of $70,892M, Revenue per Share of $90.22, and a Stock Price of $40.10. This ratio is 14% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
Results of stock price testing is that the stock price is probably reasonable. The 10 year median dividend yield test says that the stock price is relatively reasonable and below the median. The P/S Ratio says the stock price is reasonable but above the median. Most of the rest of the testing is showing the stock price as relatively reasonable.
When I look at analysts’ recommendations, I find Strong Buy (1), Buy (2), and Hold (6). The consensus would be a Buy. The 12 month stock price consensus is $43.78 with a high of $47.00 and a low of $42.00. The consensus price of $43.78 implies a total return of 14.73% with 9.12% from capital gains and 5.61% from dividends.
Analysts on Stock Chase are positive about this company. One said he liked GWO better. Puja Tayal on Motley Fool called this stock a magnificent dividend stock. Amy Legate-Wolfe on Motley Fool says buy for passive income. The company put out a press release via Newswire about their fourth quarter of 2023 results.
Simply Wall Street via Yahoo Finance reviews this stock. Simply Wall Street gives this stock 4 stars out of 5. It lists no risks warnings.
Power Corporation of Canada is a holding company with controlling interests in Great-West Life (an insurance conglomerate), IGM Financial (Canada's largest nonbank asset manager), and other alternative asset-management platforms (Sagard and Power Sustainable). The company also has minority interests in Groupe Bruxelles Lambert (a holding company with interests in European companies) and China AMC (an asset manager in China). Its web site is here Power Corp of Canada.
The last stock I wrote about was about was McCoy Global Inc (TSX-MCB, OTC-MCCRF) ... learn more. The next stock I will write about will be Ag Growth International (TSX-AFN, OTC-AGGZF) ... learn more on Wednesday, May 15, 2024 around 5 pm. Tomorrow on my other blog I will write about Dividend Earner Blogger.... learn more on Tuesday, May 14, 2024 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
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