POW.TO  Power Cp Of Canada

Exchange

TSX

Sector

Diversified Industries

Industry

Market Cap.

15.20B

Current Price

$32.80
+0.36 (+1.11%)

Book Price

$34.76
Undervalued by 5.98%
Financial Institution

Company Metrics

  • P/E 11.15
  • P/S 0.3
  • P/B 1.14
  • EPS 2.94
  • Dividend 1.14 / 4.67%
  • Avg. Vol. 677,794.00
  • Shares 463.41M
  • Market Cap. 15.20B

Company Description

Power Corporation of Canada operates as a diversified international management and holding company with interests primarily in the financial services, communications, and other business sectors in North America, Europe, and Asia. The company, through its subsidiaries, provides a range of life and health insurance, retirement savings, investment management, annuities, and reinsurance products to in... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

How Does Power Corporation of Canada's (TSX:POW) EPS Growth Stack Up Against ...
Simply Wall St - Oct 18, 2017
Power Corporation of Canada (TSX:POW), an established company with a market capitalization of CAD $15.09B, delivered an impressive EPS growth of 20.41% over the past year.
Read this before buying Power Corporation of Canada (TSX:POW) for its upcoming ...
Simply Wall St - Sep 3, 2017
Attention dividend hunters! Power of Canada (TSX:POW) will be distributing its dividend of $0.36 per share in 3 days time, on the Fri 29 Sep 2017, and will start trading ex-dividend on the Thu 07 Sep 2017.
Power Corporation of Canada: Opportunity or Value Trap?
The Motley Fool Canada - Jul 11, 2017
Power Corporation of Canada (TSX:POW) is a diversified international management and holding company with interests in financial services, communications, and other businesses.
Power Corporation of Canada and Leon's Furniture Ltd.: 2 Different Businesses ...
The Motley Fool Canada - Sep 12, 2017
One year ago, almost to the day, I recommended that investors forego BCE Inc. (TSX:BCE)(NYSE:BCE), its juicy 4% dividend yield, and $62 share price and instead buy Power Corporation of Canada (TSX:POW) and Leon's Furniture Ltd. (TSX:LNF) while ...
Power Corporation of Canada (TSX:POW): Is CEO Being Overpaid?
Simply Wall St - Aug 15, 2017
Paul Desmarais took the reins as Power Corporation of Canada's (TSX:POW) CEO in 1996 and earned a total compensation of $3,277,383 over the past year.
Are Analysts Bullish Power Corporation of Canada (TSE:POW) After Last Week?
BZ Weekly - Oct 18, 2017
Among 3 analysts covering Power Corporation of Canada (TSE:POW), 1 have Buy rating, 0 Sell and 2 Hold. Therefore 33% are positive.
Power Corporation of Canada (TSX:POW): What Are The Future Prospects?
Simply Wall St - Sep 18, 2017
Based on the latest analyst predictions, Power Corporation of Canada (TSX:POW) is estimated to sizably grow its earnings by 12.30% in the upcoming three years.
Power Corp of Canada (PWCDF) Triple EMA Gaining Momentum
Stock Daily Review - Oct 19, 2017
Power Corp of Canada (PWCDF) has watched the Triple Exponential Moving Average (TEMA) of it's share price trend higher over the past 5 session.
Shares Running on Volume: Power Corporation of Canada Sv (POW.TO)
JCTY News - 18 hours ago
Power Corporation of Canada Sv (POW.TO) shares are moving today on volatility 1.29% or 0.42 from the open. The TSX listed company saw a recent bid of 32.86 and 256721 shares have traded hands in the session.
Power Corp of Canada (PWCDF)'s Moving Averages in Focus
Nelson Research - 19 hours ago
Power Corp of Canada (PWCDF)'s 5-Day Moving Average is 25.936, its 3-Month Moving Average is 24.838 and its 12-Month Moving Average is 23.276.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for POW.TO to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate POW.TO's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

Poor Cash Return on Invested Capital over the past 5 years

POW.TO has been unable to consistently generate sufficient returns from its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

POW.TO has only created $- of cash for every $100 invested.
Figures in CAD. Fiscal year ends in December
20122013201420152016
Free Cash Flow - - - - -
divided by
Invested Capital 271.65B 345.01B 377.78B 422.86B 422.90B
Cash ROIC - - - - -

Shrinking Return on Equity over the past 5 years

POW.TO has been shrinking returns with capital that shareholders have invested. This is a negative sign and demonstrates that both the business and management performance are weakening over time.

POW.TO has generated $12.03 of Earnings for every $100 of Shareholders' Equity.
Figures in CAD. Fiscal year ends in December
20122013201420152016
Net Income 1.87B 1.03B 1.33B 1.84B 1.13B
divided by
Stockholders' Equity 10.10B 11.05B 11.98B 14.03B 13.86B
Return on Equity 18.47% 9.31% 11.08% 13.10% 8.18%

Poor Business Performance over the past 10 years

POW.TO's inability to produce positive free cash flow for the majority of the past 10 years is concerning. It should be a red flag, since this company does not have a track record of delivering results for shareholders. This could be due to poor management or the nature of its business.

POW.TO has been losing money for the majority of the past 10 years.
Figures in CAD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow - - - - - - - - - -

Low or No Reinvestment of Profits over the past 10 years

POW.TO has either been retaining a small amount of their earnings or has done so inconsistently. A lack of consistency could be due to POW.TO operating at a loss or them having such a strong economic moat they feel comfortable spending profits on growth. Be wary of future prospects and if applicable, inspect the moat's sustainability.
Figures in CAD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 8.30B 8.61B 8.74B 9.07B 8.12B 8.26B 8.79B 9.42B 10.52B 10.81B
Retained Earnings Growth - 3.71% 1.51% 3.72% -10.46% 1.79% 6.40% 7.16% 11.68% 2.67%

Highly Competitive Industry over the past 10 years

It's likely that POW.TO is in an industry with low barriers to entry, spurring high competition. If Gross Margins are at least satisfactory, it's likely POW.TO invests heavily in R&D and Sales, General & Administrative expenses.

Only $- of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in CAD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 1.46B 868.00M 682.00M 907.00M 1.12B 1.87B 1.03B 1.33B 1.84B 1.13B
divided by
Revenue - - - - - - - - - -
Net Profit Margin - - - - - - - - - -

Weak Pricing Power over the past 10 years

POW.TO is likely in a highly competitive industry, due to low barriers to entry. It's because of this, that POW.TO has been unable to raise prices and increase their profitability. This puts them in a poor position if inflation becomes an issue, as they would struggle to pass higher costs onto consumers.

Only $- of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in CAD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit - - - - - - - - - -
divided by
Revenue - - - - - - - - - -
Gross Margin - - - - - - - - - -

Low Capital Intensity over the past 10 years

POW.TO has consistently used a small portion of their Net Income buying new equipment or investing in new facilities. This indicates that POW.TO may require minimal investment to stay competitive. This leaves them with extra money to spend on growing their business and potentially buying back stock.

-% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in CAD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure - - - - - - - - - -
divided by
Net Income 1.46B 868.00M 682.00M 907.00M 1.12B 1.87B 1.03B 1.33B 1.84B 1.13B
Capital Expenditure Ratio - - - - - - - - - -

Very Strong Dividend History over the past 10 years

POW.TO has consistently distributed a dividend for at least the past 10 years. Such a long dividend history suggests POW.TO is very established in its market and that its dividend distribution is likely to continue for a significant period of time.
Figures in CAD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid 460.00M 1.47B 1.60B 1.64B 1.65B 1.69B 1.74B 1.75B 1.82B 662.00M
divided by
Shares Outstanding 471.94M 457.70M 458.10M 459.30M 460.40M 460.50M 461.20M 462.50M 464.40M 464.20M
Dividend Paid Per Share 0.97 3.19 3.46 3.53 3.56 3.64 3.74 3.76 3.89 1.42
Price at Year End 33.68 19.41 26.66 26.81 23.82 25.12 32.05 31.72 29.44 30.05
Dividend Yield 2.87% 16.43% 12.97% 13.18% 14.97% 14.50% 11.67% 11.84% 13.22% 4.71%

History of Stock Buybacks over the past 10 years

POW.TO has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in CAD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 471.94M 457.70M 458.10M 459.30M 460.40M 460.50M 461.20M 462.50M 464.40M 464.20M
Stock Bought Back - 3.11% -0.09% -0.26% -0.24% -0.02% -0.15% -0.28% -0.41% 0.04%
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