December 10, 2018

Power Financial Corp PWF

 

 

 

 

Power Financial Corporation (PWF) is the main subsidiary of the massive holding company Power Corp (POW).  Power Corp owns three main branches of businesses, of which Power Financial is by far the largest one.  While Power Financial Corporation is obviously a publically funded entity, Power Corp does own about 60-70% of the shares.  While Power Corp is based out of Montreal, Power Financial (PWF) has its headquarters in Winnipeg, MB.  It is a well-diversified company concentrated in Canada, the USA and Europe.  If you would like more information on the parent company of Power Financial Corporation, we have a company profile on Power Corp (POW) here.

 

power financial corporationPower Corporation owns a controlling share of several public entities.  Its three largest subsidiaries and the percentages of them that Power Financial (PWF) owns are Great-West Lifeco (68%), IGM Financial Inc. (57%), and Parjointco N.V. (50%).  Through these holdings Power owns a bevy of well-known financial brands such as Putnam Investments, Great-West Life & Annuity Insurance Company, The Great-West Life Assurance Company, London Life Insurance Company, The Canada Life Assurance Company, Investors Group Inc, and the Mackenzie Financial Corporation.  The structure of Power Financial (PWF) might seem a little awkward to some, but it is a way to invest in the more specific financial branch of Power Corporation (POW).  Power Corporation is a holding company that is comparable to smaller scale Berkshire Hathaway.  Power Financial is a holding company in and of itself, but one that focuses purely on financial investment opportunities.

 

In Power Financial Corp’s (PWF) most recent financial report they stated that quarterly profits were up 20% because of strong insurance and mutual fund activity.  They earned 507 million after taxes ($0.72 per share) up from 422 million ($.60 per share) in the same quarter during the proceeding year.  The rise in earnings was due to a more efficient labour structure and an 11.9% increase in revenues (revenues totalled 931 million during the period).

 

Obviously the financial sector, and especially insurance companies, have been hit hard by the recent market volatility.  The balance sheets reveal that Power Financial’s (PWF) fundamentals are solid, and that the company is profitable, even in this less-than-ideal economic climate.  Fortunately for investors, the share price of most financial companies does not reflect this reality, as most are trading at, or near their 52-week lows.  Power Financial (PWF) is trading at around 12.5 times earnings at the moment, with a ridiculous yield of 5.20%.  You may want to consider investing in either IGM Financial (IGM) or Great-West Lifeco (GWO) directly, as opposed to owning shares in the more general holding company of Power Financial Corp (PWF) or Power Corp (POW).  I prefer to be exposed to as much diversity as possible, but the same economic conditions will likely affect all of the companies in a very similar manner.  Overall, I think insurance and financials are at an excellent entry price rate at the moment.  With these low P/E ratios, and superb dividend yields (that are on the rise in many cases) they represent a great opportunity for dividend investors.

 

 

Power Financial Corporation (PWF) Dividend Stock Graph:

TSE PWF

Power Financial Corporation (PWF) Dividend Metrics:

TickerNamePriceDividend YieldPayout RatioDEBT_TO_MKT_CAPDividend Growth 5 yearsDividend Growth 1 years
PWFPower Financial Corp31.44.4666.640.35473229.2388470

 

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