POW.TO  Power Cp Of Canada

Exchange

TSX

Sector

Diversified Industries

Industry

Market Cap.

14.85B

Current Price

$32.06
-0.01 (-0.03%)

Book Price

$37.03
Undervalued by 15.50%
Financial Institution

Company Metrics

  • P/E 16.00
  • P/S 0.29
  • P/B 1.18
  • EPS 2.00
  • Dividend 0.99 / 4.04 %
  • Avg. Vol. 770,002.00
  • Shares 463.19M
  • Market Cap. 14.85B

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

Why I Wouldn't Touch Power Corporation of Canada
The Motley Fool Canada - Jan 3, 2017
Power Corporation of Canada (TSX:POW) is a diversified Canadian holding company which has over $1.4 trillion worth of assets under management.
BRIEF-Power Corporation Of Canada announces issue of debentures
Reuters - Jan 26, 2017
MADRID, Feb 10 Spain's Telefonica has received several offers for a stake in its telecom masts subsidiary Telxius, the telecoms company said in a statement on Friday, adding it was negotiating and analysing the different options available.
Power Corporation of Canada: The Yield Is Not the Reason to Own it
The Motley Fool Canada - Feb 16, 2016
The debate whether to own Power Corporation of Canada (TSX:POW) or its sister company, Power Financial Corp. (TSX:PWF), has been going on for years; it's a discussion that will likely carry on well after I'm gone.
Deadline approaches to apply for Power Corporation of Canada research ...
Canadian Architect - Mar 31, 2016
The CCA, with the support of the Power Corporation of Canada, invites students enrolled at the Masters level in Canadian architecture schools to take part in a collaborative, three-month residency at the CCA on the topic of architecture and the ...
Power Corp. of Canada (POW) Shares Cross 5% Yield Mark
Forbes - Jun 27, 2016
In trading on Monday, shares of Power Corp. of Canada (Toronto: POW) were yielding above the 5% mark based on its quarterly dividend (annualized to $1.34), with the stock changing hands as low as $26.63 on the day.
Power Corporation - Closing of Debenture Issue
Canada NewsWire (press release) - Jan 31, 2017
MONTRÉAL, Jan. 31, 2017 /CNW Telbec/ - Power Corporation of Canada (TSX: POW) announced today that it has completed its offering of $250 million aggregate principal amount of 4.81% debentures due January 31, 2047 (the "Debentures").
Power Corporation - Dividends on Preferred and Participating Shares
Yahoo Finance - Feb 15, 2017
Power Corporation of Canada is a diversified international management and holding company with interests in companies in the financial services, communications and other business sectors in North America , Europe and Asia .
TSX listed corporate dividends and distributions declared Feb. 14
Brandon Sun - Feb 14, 2017
Power Corporation Of Canada Participating Pr (TSX:POW.PR.E): $0.335. Payable Mar 31. Record Mar 10.<. Power Corporation Of Cda 1st Pr 1986 (TSX:POW.
Research Reports Initiated on Insurance Stocks Industrial Alliance Insurance ...
Satellite PR News (press release) - Jan 24, 2017
Active Wall St. has initiated research reports on the following equities: Industrial Alliance Insurance and Financial Services Inc. (TSX: IAG), Power Corporation of Canada (TSX: POW), Power Financial Corporation (TSX: PWF), and Manulife Financial ...
Dividend Select 15 at 52-Week Highs
Baystreet.ca - Feb 21, 2017
Pembina Pipeline Corporation (T.PPL) hit a new 52-week high of $42.98 Tuesday. No news announcements today. Tricon Capital Group Inc. (T.
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
20112012201320142015
Free Cash Flow - - - - -
divided by
Invested Capital 255.50B 271.65B 345.01B 377.78B 422.86B
Cash ROIC - - - - -

Satisfactory Return on Equity over the past 5 years

POW.TO has generated adequate returns with capital that shareholders have invested. This is sufficient and implies that management performance has been good.

POW.TO has generated $12.66 of Earnings for every $100 of Shareholders' Equity.
Figures in CAD. Fiscal year ends in December
20112012201320142015
Net Income 1.12B 1.87B 1.03B 1.33B 1.84B
divided by
Stockholders' Equity 9.83B 10.10B 11.05B 11.98B 14.03B
Return on Equity 11.36% 18.47% 9.31% 11.08% 13.10%

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
2006200720082009201020112012201320142015
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
2006200720082009201020112012201320142015
Retained Earnings 7.48B 8.30B 8.61B 8.74B 9.07B 8.12B 8.26B 8.79B 9.42B 10.52B
Retained Earnings Growth - 11.02% 3.71% 1.51% 3.72% -10.46% 1.79% 6.40% 7.16% 11.68%

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
2006200720082009201020112012201320142015
Net Income 1.39B 1.46B 868.00M 682.00M 907.00M 1.12B 1.87B 1.03B 1.33B 1.84B
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
2006200720082009201020112012201320142015
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
2006200720082009201020112012201320142015
Capital Expenditure - - - - - - - - - -
divided by
Net Income 1.39B 1.46B 868.00M 682.00M 907.00M 1.12B 1.87B 1.03B 1.33B 1.84B
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
2006200720082009201020112012201320142015
Dividend Paid 1.10B 460.00M 1.47B 1.60B 1.64B 1.65B 1.69B 1.74B 1.75B 1.82B
divided by
Shares Outstanding 469.02M 471.94M 457.70M 458.10M 459.30M 460.40M 460.50M 461.20M 462.50M 464.40M
Dividend Paid Per Share 2.33 0.97 3.19 3.46 3.53 3.56 3.64 3.74 3.76 3.89
Price at Year End 29.26 33.68 19.41 26.66 26.81 23.82 25.12 32.05 31.72 29.44
Dividend Yield 7.95% 2.87% 16.43% 12.97% 13.18% 14.97% 14.50% 11.67% 11.84% 13.22%

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
2006200720082009201020112012201320142015
Shares Outstanding 469.02M 471.94M 457.70M 458.10M 459.30M 460.40M 460.50M 461.20M 462.50M 464.40M
Stock Bought Back - -0.62% 3.11% -0.09% -0.26% -0.24% -0.02% -0.15% -0.28% -0.41%
Share your thoughts about POW.TO

Sign Up or Log In to start contributing!


Discussion

Nothing here yet. Be the first to post!