IGIFF - Power Corporation of Canada: Blue Chip Assets For 25% Off Plus A 5.7% Yield

2024-06-05 04:16:30 ET

Summary

• Power Corporation of Canada is trading at a 25% discount to its net asset value.
• The company has taken steps to improve the discount, but it is expected to persist.
• Power Corporation's ownership stakes in Great-West Lifeco and IGM Financial are expected to drive earnings growth.
• It pays an attractive 5.7% dividend, a payout poised to grow with earnings.

(All figures are in Canadian Dollars unless otherwise stated)

Power Corporation of Canada ( POW:CA )(PWCDF) is a collection of blue-chip financial assets that are trading at a 25% discount to the sum of their parts. But this isn't really a sum-of-the-parts story, since the stock is poised to deliver solid total returns and pay generous dividends even if the discount persists.

Introduction

Power Corporation of Canada is a holding company that can trace its history all the way back to 1925. Not surprisingly considering its name, Power was originally formed to invest in hydro power assets in Quebec....

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