Power Corp of Canada (POW) AI Stock Analysis

• Market Cap: C$31.09B
• Dividend Yield: 4.7%
• Average Volume (3M): 3.55M
• Price to Earnings (P/E): 11.7
• Beta (1Y): 0.88
• Revenue Growth: -7.62%
• EPS Growth: 25.47%
• Country: CA
• Employees: 30,000
• Sector: Financial
• Sector Strength: 79
• Industry: Insurance - Life
• EPS (TTM): 4.17
• Shares Outstanding: 587,725,000
• 10 Day Avg. Volume: 4,614,588
• 30 Day Avg. Volume: 3,552,124
• PEG Ratio: 0.46
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.89
• Price to Cash Flow (P/CF): 6.40
• P/FCF Ratio: 1.70
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$54.88
• Price Target Upside: 13.06% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8

Power Corp of Canada shows a robust financial foundation with strong cash flow and a stable balance sheet, although revenue decline poses a risk. The stock's positive technical momentum and attractive valuation offer growth potential. Earnings call highlights strong core performance and shareholder value initiatives, supporting a positive outlook.

Positive Factors

Earnings Contribution

GBLB's estimated contribution to POW's adjusted earnings was better than expected, at C$20mm versus the previous C$11mm estimate.

Share Buybacks

There is an estimated $600 million available for continued share buybacks, which could positively impact the stock.

Target Price Increase

The target price for the stock has been increased to $52 from $49, reflecting recently increased targets for GWO and IGM.

Negative Factors

Earnings Miss

Power Corp of Canada missed its earnings expectations, reporting an adjusted EPS of $0.84 compared to the consensus of $1.13/$1.14.

Impairment Charges

The company's standalone businesses and other investments recorded significant non-cash impairment charges, contributing to weaker financial results.

Reliance on Subsidiaries

A heavier reliance on GWO/IGM makes it difficult to achieve NAV growth given Market Perform ratings on these subsidiaries.

Power Corp of Canada Business Overview & Revenue Model

Company Description

Power Corporation of Canada operates as an international management and holding company in North America, Europe, and Asia. It operates through Lifeco, IGM Financial, and GBL segments. The company offers life, disability, critical illness, accidental death, dismemberment, health and dental protection, and creditor insurance; retirement and investment management; asset management; and reinsurance and retrocession; investment advisory, financial planning, and related services; and fund, protection, and wealth management services. It also provides employer-sponsored defined contribution plan, individual retirement account and drawdown, enrollment, communication material, investment option, and education services, as well as taxable brokerage accounts; private label recordkeeping and administrative services; payout annuities, equity release mortgages, life bonds, mortgage, securities, pension, private equity, debt and thematic fund, and financial services; and investment products, such as equity, fixed income, absolute return and alternative strategies, exchange traded funds, trust funds, and model-based separately managed accounts and portfolios. In addition, the company holds interests in various businesses, such as mineral-based specialty solutions; testing, inspection, and certification; cement, aggregates, and concrete; wines and spirits; sportswear and sports equipment design and distribution; materials technology and recycling of precious metals; disposable hygiene products; Atlantic salmon; customer experience and business process outsourcing; regional leisure parks; mobile game development and publishing; and bicycle manufacturing. Further, it generates renewable energy through solar and wind facilities; and designs, develops, and manufactures specification-grade LED solutions and zero-emission vehicles. The company was incorporated in 1925 and is based in Montréal, Canada. Power Corporation of Canada operates as a subsidiary of Pansolo Holding Inc.

How the Company Makes Money

Power Corporation of Canada generates revenue primarily through its various subsidiaries, which operate in the financial services industry. The company's main revenue streams come from insurance premiums, fees from investment management services, and income from its asset management business. Its subsidiaries, such as Great-West Lifeco and IGM Financial, contribute significantly to its earnings by providing life and health insurance products, wealth and asset management services, and retirement savings plans. Additionally, Power Corp earns income from its investments in alternative energy and other sectors, further diversifying its revenue base. Strategic partnerships and a focus on sustainable investments also play a role in enhancing the company's financial performance.

Power Corp of Canada Financial Statement Overview

Summary

Power Corp of Canada presents a solid financial standing with consistent revenue growth and stable profitability margins. The company exhibits a balanced approach in handling debt, though high leverage poses a potential risk. Cash flow generation remains robust, providing financial flexibility despite recent declines in operating cash flow.

Income Statement

Power Corp of Canada has shown a consistent increase in revenue over the period, with a notable revenue growth rate of 9.70% from the previous year to the TTM. However, there is a slight decline in EBIT and EBITDA margins in the TTM, indicating a potential rise in operational costs or reduced operational efficiency. The net profit margin remains stable at around 4.45%, indicating consistent profitability despite fluctuations in other areas.

Balance Sheet

The company's debt-to-equity ratio remains relatively high, suggesting a significant use of leverage. However, the equity ratio stands at 2.79% in the TTM, indicating a low level of equity compared to total assets, which is typical in the insurance industry due to large liabilities. Return on Equity (ROE) is moderate at 9.89%, reflecting decent profitability relative to equity.

Cash Flow

Power Corp's cash flow statement shows a strong operating cash flow to net income ratio, suggesting effective cash conversion from operations. The free cash flow growth rate is substantial at 67.61%, indicating improved liquidity and financial flexibility. However, the decline in operating cash flow from previous periods raises concerns about long-term cash generation stability.

Breakdown
TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
50.93B	46.43B	48.74B	69.56B	64.62B	48.84B
	Gross Profit
51.83B	46.43B	48.74B	69.56B	64.62B	48.84B
	EBIT
2.14B	6.97B	3.09B	3.04B	1.59B	885.00M
	EBITDA
-256.00M	4.90B	5.89B	5.96B	4.67B	4.62B
	Net Income Common Stockholders
2.27B	2.25B	3.54B	4.67B	3.53B	3.04B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
6.44B	21.88B	22.25B	8.16B	9.48B	6.80B
	Total Assets
452.30B	749.48B	733.65B	661.63B	629.10B	477.25B
	Total Debt
17.80B	20.94B	21.17B	19.53B	21.54B	18.25B
	Net Debt
11.36B	11.80B	12.31B	11.37B	12.06B	11.45B
	Total Liabilities
414.26B	708.21B	689.55B	617.90B	590.37B	440.67B
	Stockholders Equity
15.12B	22.14B	24.02B	24.34B	22.21B	14.17B
Cash Flow		Free Cash Flow
7.98B	4.76B	6.70B	10.49B	9.71B	6.62B
	Operating Cash Flow
8.74B	5.93B	7.50B	11.05B	10.10B	6.62B
	Investing Cash Flow
-4.67B	-2.62B	-6.50B	-10.58B	-8.41B	-1.48B
	Financing Cash Flow
-2.82B	-2.80B	-948.00M	-962.00M	1.64B	-4.63B

Power Corp of Canada Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 48.54
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:POW, the sentiment is Neutral. The current price of 48.54 is below the 20-day moving average (MA) of 49.85, above the 50-day MA of 48.16, and above the 200-day MA of 43.16, indicating a neutral trend. The MACD of 1.02 indicates Negative momentum. The RSI at 71.99 is Negative, neither overbought nor oversold. The STOCH value of 75.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:POW.

Power Corp of Canada Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
POW	75 Outperform	C$31.09B	11.66	12.45%	4.70%	-7.62%	25.47%
GWO	73 Outperform	C$48.77B	12.54	15.52%	4.29%	-2.40%	42.24%
Sector *	64 Neutral	$13.44B	9.41	9.19%	4.92%	16.30%	-8.66%

Power Corp of Canada Corporate Events

Power Corporation Reports Strong 2024 Financial Results and Dividend Increase

Power Corporation of Canada reported strong financial results for the fourth quarter and full year of 2024, with significant increases in net earnings and adjusted net earnings compared to the previous year. The company also announced a 9% dividend increase and highlighted strategic initiatives such as share buybacks and partnerships, which are expected to bolster its market position and enhance shareholder value.

Power Corporation to Release Year-End 2024 Financial Results

Power Corporation of Canada is set to release its fourth quarter and year-end 2024 financial results on March 19, 2025, after market close. The announcement will be followed by a conference call and webcast on March 20, 2025, where the company’s executives will discuss the results, providing stakeholders with insights into the company’s financial performance and strategic direction.