Power Corp of Canada

Sound bite for Twitter is: Dividend Growth Financial. Results of stock price testing is that the stock price is probably reasonable but above the median. Debt Ratios are fine, but it does have lots of debt. The Dividend Payout Ratios (DPR) are fine. The current dividend yield is moderate with dividend growth low. See my spreadsheet on Power Corp of Canada.

Is it a good company at a reasonable price? I still like life insurance companies for the long term, even though that had it rather rough when interest rates were very low to negative. The current dividend yield is rather high historically and this is a positive. Analysts have a mixed view on where it is the right time to buy or not. It is just off an historical high, so that is a negative. There maybe better deals in TSX stocks than this one. The stock price could be reasonable, but it could also be on the high side that a lot of testing is pointing to.

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 I have had this stock for 23 years and I have made several purchases. I have a total return of 13.33% per year with 4.34% from capital gains and 8.99% from dividends.

If you had invested in this company in December 2014, for $1,016.32 you would have bought 32 shares at $31.76 per share. In December 2024, after 10 years you would have received $539.25 in dividends. The stock would be worth $1,434.88. Your total return would have been $1,974.13. This would be a total return of 7.94% per year with 3.51% from capital gain and 4.33% from dividends.

Cost	Tot. Cost	Shares	Years	Dividends	Stock Val	Tot Ret
$31.76	$1,016.32	32	10	$539.25	$1,434.88	$1,974.13

The current dividend yield is moderate with dividend growth low. The current dividend yield is moderate (2% to 4% ranges) at 4.84%. The 5 and 10 year median dividend yields are good (5% to 6% ranges) at 5.38% and 5.32%. The historical median dividend yield is moderate at 2.74%. The dividend increases are low (below 8% per year) at 6.7% per year over the past 5 years. The last dividend increase was in 2025 and it was for 8.9%.

The Dividend Payout Ratios (DPR) are fine. The DPR for 2024 for Earnings per Share (EPS) is fine at 53% with 5 year coverage at 55%. The DPR for 2024 for Adjusted Earnings per Share (AEPS) is good at 48% with 5 year coverage fine at 52%. The DPR for 2024 for Cash Flow per Share (CFPS) is good at 31% with 5 year coverage at 11%. The DPR for 2024 for Free Cash Flow (FCF) is good at 29% with 5 year coverage at 19%.

Item	Cur	5 Years
EPS	52.79%	55.55%
AEPS	48.30%	51.97%
CFPS	30.91%	10.63%
FCF	29.32%	19.43%

Debt Ratios are fine, but it does have lots of debt. The Long Term Debt/Market Cap Ratio for 2024 is high at 8.53 and currently at 6.38. However, we need also to look at the Long Term Debt/Covering Assets Ratio for 2024 which is good at 0.90 and currently at 0.94 because this is a more important ratio for a Financial. The Liquidity Ratio for 2024 is good at 3.22 and 1.45 currently. The Debt Ratio for 2024 is fine for a financial at 1.05 and 1.07 currently. The Financial Leverage for 2024 are good at 29% and currently at 29%.

Type	Year End	Ratio Curr
Lg Term R+A	0.90	0.94
Lg Term R	8.53	6.38
Intang/GW	0.75	0.61
Liquidity	3.22	1.45
Liq. + CF	3.90	1.64
Debt Ratio	1.05	1.07
Financial Lev	29%	29%

The Total Return per year is shown below for years of 5 to 37 to the end of 2024. 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.
2019	5	6.73%	11.23%	6.04%	5.19%
2014	10	6.67%	7.94%	3.51%	4.43%
2009	15	4.40%	6.98%	2.90%	4.08%
2004	20	7.18%	5.33%	1.86%	3.47%
1999	25	9.22%	9.68%	5.28%	4.40%
1994	30	10.20%	13.40%	7.89%	5.51%
1989	35	10.15%	11.49%	7.20%	4.30%
1987	37	9.58%	11.13%	7.09%	4.04%

The 5-year low, median, and high median Price/Earnings per Share Ratios are 8.62, 10.00 and 11.37. The corresponding 10 year ratios are 9.15, 10.51 and 11.78. The corresponding historical ratios are 10.40, 12.22 and 16.24. The current ratio is 9.31 based on a stock price of $50.60 and EPS estimate for 2025 of $5.44. The ratio is between the low and median ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.

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 10.41. The corresponding 10 year ratios are 7.94, 9.11 and 10.47. The corresponding historical ratios are 9.58, 10.88 and 11.90. The current ratio is 9.75 based on a stock price of $50.60 and AEPS estimate for 2025 of $5.19. 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 Graham Price of $64.82. The 10-year low, median, and high median Price/Graham Price Ratios are 0.58, 0.65 and 0.75. The current P/GP Ratio is 0.78 based on a stock price of $50.60. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.

I get a 10-year median Price/Book Value per Share Ratio of 1.06. The current P/B Ratio is 1.41 based on a stock price of 50.60, Book Value of $23,199M, and Book Value per Share of $35.98. The current ratio is 33% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

I also have a Book Value per Share estimate for 2025 of $37.48. This implies a ratio of 1.31 based on a stock price of $60.50 and Book Value of $24,812M. This ratio is 24% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

I get a 10-year median Price/Cash Flow per Share Ratio of 2.17. The current P/CF Ratio is 6.14 based on Cash Flow per Share for the last 12 months of $8.23, Cash Flow of $5,310 and a stock price of 50.60. The current ratio is 183% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

I get an historical median dividend yield of 2.74%. The current dividend yield is 4.84% based on dividends of 2.45 and a stock price of $50.60. The current yield is 77% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.

I get a10 yar median dividend yield of 5.32%. The current dividend yield is 4.84% based on dividends of 2.45 and a stock price of $50.60. The current yield is 9% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median. The current dividend yields are higher than they were in the past.

The 10-year median Price/Sales (Revenue) Ratio is 0.33. The current P/S Ratio is 0.44 based on Revenue estimate for 2025 of $73,320M, Revenue per Share of $113.71 and a stock price of $50.60. The current ratio is 36% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. The problem is that the International Accounting Standard board has been changing the rules on revenue for insurance companies. I wonder how good this test is.

Results of stock price testing is that the stock price is probably reasonable but above the median. This is what the 10 year median dividend yield test says. A lot of the tests say that the stock price is expensive and this is a negative. I wonder about the P/S Ratio test as accounting rules have been changing this year for life insurance companies. That makes continuity in my spreadsheets rather hard.

When I look at analysts’ recommendations, I find Strong Buy (2), Buy (2), Hold (3) and Underperform (1). The consensus would be a buy. The 12 month stock price consensus is $54.44 with a high of $61.00 and a low of $44.50. The stock price consensus price of $54.44 implies a total return of 12.43% with 7.59% from capital gains and 4.84% from dividends.

Analysts on Stock Chase mainly see this as a buy and a defensive type stock. Brian Paradza on Motley Fool see this stock as an attractive dividend-growth stock. Puja Tayal on Motley Fool see this company as a cash-gushing dividend stock. The company put out a Press Release about their fourth quarter of 2024.

Simply Wall Street via Motley Fool talks about this stock as one of three top TSX dividend stocks yielding up to 4.9%. Simply Wall Street via Yahoo Finance talks about who owns stock in this company. They say insiders are selling. I follow 7 officers and directors. Two increased their shares, two sold some shares and the directors maintained what they had. For example, the CEO increase his shares by 33% and an officer decreased his by 7.07%.

Power Corporation of Canada is a holding company with controlling interests in Great-West Lifeco (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 ChinaAMC (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 Friday, May 16, 2025 around 5 pm. Tomorrow on my other blog I will write about Capitalism Not Based on Greed .... learn more on Thursday, May 15, 2025 around 5 pm.

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