Power Corp of Canada (POW) AI Stock Analysis

• Market Cap: C$32.63B
• Dividend Yield: 4.79%
• Average Volume (3M): 1.72M
• Price to Earnings (P/E): 12.1
• Beta (1Y): 0.83
• Revenue Growth: 7.63%
• EPS Growth: 8.84%
• Country: CA
• Employees: 30,000
• Sector: Financial
• Sector Strength: 79
• Industry: Insurance - Life
• EPS (TTM): 1.22
• Shares Outstanding: 587,062,700
• 10 Day Avg. Volume: 2,102,017
• 30 Day Avg. Volume: 1,723,151
• PEG Ratio: -24.35
• Price to Book (P/B): 1.33
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 7.10
• 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$55.50
• Price Target Upside: 8.59% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 72 Outperform
• Price Target: ―

Power Corp of Canada shows resilience with robust cash flow management, stable financials, and an attractive dividend yield. The earnings call underscores growth in net earnings and strategic initiatives. However, challenges in revenue growth and operational efficiency, coupled with recent share price volatility, temper the outlook. The stock's technical indicators suggest caution in the short term, though long-term valuation remains appealing.

Positive Factors

Corporate Structure

POW's reorganization simplifies its corporate structure and generates modest EPS accretion.

Earnings Contribution

GBLB's contribution to POW's adjusted earnings exceeded expectations, reaching C$20 million compared to a previous estimate of C$11 million.

Target Price

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

Negative Factors

Earnings Estimate

Adjusted EPS for 2025 is modestly lowered to $5.42 from $5.47, due in part to consolidation adjustments.

Reliance on Segments

Heavier reliance on GWO/IGM poses challenges for NAV growth, given Market Perform ratings on these segments.

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 through its diversified portfolio of subsidiaries primarily in the financial services sector. Key revenue streams include premiums and fees from insurance products offered by Great-West Lifeco, management fees, and investment income from IGM Financial's mutual funds and investment services. Additionally, Power Corp benefits from dividend income and capital appreciation through its investment in Groupe Bruxelles Lambert, a holding company with stakes in European blue-chip companies. The company also seeks to enhance its earnings through strategic partnerships and investments in the renewable energy sector, aiming to capitalize on the growing demand for sustainable energy solutions. This diversified approach helps Power Corp maintain a stable and growing income stream.

Power Corp of Canada Financial Statement Overview

Summary

Power Corp of Canada shows mixed financial performance. While there's a decline in revenue, the company has improved its net profit margin. The balance sheet reflects financial stability with controlled leverage and a strong equity position. Cash flow remains robust, with effective cash conversion and solid free cash flow generation.

Income Statement

Power Corp of Canada showed a decline in total revenue from 2023 to 2024, impacting its growth trajectory. The gross profit margin remains consistent due to the nature of the business, with gross profit equaling total revenue. The net profit margin increased from 4.84% in 2023 to 7.02% in 2024, indicating improved profitability despite lower revenue. The decline in EBIT and EBITDA margins in 2024 compared to 2023 signals challenges in operational efficiency.

Balance Sheet

The company maintains a strong equity position, with a debt-to-equity ratio of 0.95 in 2024, reflecting moderate leverage. Return on equity (ROE) improved to 11.70% in 2024, demonstrating effective use of equity to generate profit. The equity ratio remained stable at 2.80%, indicating a balanced capital structure. Overall, the balance sheet suggests financial stability with controlled leverage.

Cash Flow

Despite a slight decrease in operating cash flow from 2023, the company maintains a robust free cash flow, with a growth rate of 6.63%. The operating cash flow to net income ratio was 2.13 in 2024, highlighting efficient cash conversion. Free cash flow to net income ratio of 1.82 indicates strong cash generation relative to net income. Overall, cash flow statements reflect solid cash management and sustainability.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
34.90B	39.80B	46.43B	48.74B	69.56B	64.62B
	Gross Profit
35.58B	39.80B	46.43B	48.74B	69.56B	64.62B
	EBIT
-2.54B	5.53B	6.97B	3.09B	3.04B	1.59B
	EBITDA
5.54B	5.97B	4.90B	5.89B	5.96B	4.67B
	Net Income Common Stockholders
2.73B	2.79B	2.25B	3.54B	4.67B	3.53B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
28.63B	27.69B	21.88B	22.25B	8.16B	9.48B
	Total Assets
854.84B	851.36B	749.48B	733.65B	661.63B	629.10B
	Total Debt
21.64B	22.80B	20.94B	21.17B	19.53B	21.54B
	Net Debt
9.06B	10.25B	11.80B	12.31B	11.37B	12.06B
	Total Liabilities
810.39B	807.37B	708.21B	689.55B	617.90B	590.37B
	Stockholders Equity
24.15B	23.88B	22.14B	24.02B	24.34B	22.21B
Cash Flow		Free Cash Flow
4.46B	5.08B	4.76B	6.70B	10.49B	9.71B
	Operating Cash Flow
5.31B	5.95B	5.93B	7.50B	11.05B	10.10B
	Investing Cash Flow
-1.44B	-1.76B	-2.62B	-6.50B	-10.58B	-8.41B
	Financing Cash Flow
-1.99B	-1.32B	-2.80B	-948.00M	-962.00M	1.64B

Power Corp of Canada Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 51.11
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:POW, the sentiment is Positive. The current price of 51.11 is below the 20-day moving average (MA) of 51.24, above the 50-day MA of 50.76, and above the 200-day MA of 45.94, indicating a neutral trend. The MACD of 0.37 indicates Positive momentum. The RSI at 48.87 is Neutral, neither overbought nor oversold. The STOCH value of 38.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	72 Outperform	C$32.63B	12.12	11.92%	4.79%	7.63%	8.84%
Sector *	64 Neutral	$12.85B	9.81	7.79%	78.20%	12.23%	-7.93%
MFC		$54.89B	16.66	10.17%	3.97%	―	―
SLF		$36.60B	16.39	13.18%	3.93%	―	―
NTIOF		$38.48B	12.90	13.42%	3.23%	―	―
IAG	77 Outperform	C$13.02B	14.78	12.54%	2.50%	-7.31%	28.65%
GWO	66 Neutral	C$47.14B	12.33	14.65%	4.41%	17.48%	25.54%

Power Corp of Canada Corporate Events

Power Corporation Elects Board of Directors with Strong Shareholder Support

Power Corporation of Canada announced the election of its board of directors, with all nominees proposed by management successfully elected. The election results, disclosed in accordance with the Toronto Stock Exchange Company Manual, reflect strong shareholder support for the nominees, which may reinforce the company’s strategic direction and stability in its financial services operations across North America, Europe, and Asia.

The most recent analyst rating on (TSE:POW) stock is a Hold with a C$52.00 price target. To see the full list of analyst forecasts on Power Corp of Canada stock, see the TSE:POW Stock Forecast page.

Power Corporation Reports Q1 2025 Financial Results Amid Strategic Growth Initiatives

Power Corporation of Canada reported a decrease in net earnings for the first quarter of 2025 compared to the previous year, with net earnings from continuing operations at $689 million. However, adjusted net earnings increased to $787 million, highlighting strong performance in its subsidiaries, particularly in the Retirement and Wealth businesses. The company also saw a rise in adjusted net asset value per share and continued its share buyback program, indicating a focus on enhancing shareholder value. The strategic partnership between Sagard and GBL, along with the launch of Power Sustainable’s new investment strategy, underscores Power Corporation’s commitment to expanding its investment capabilities and strengthening its market position.

The most recent analyst rating on (TSE:POW) stock is a Hold with a C$52.00 price target. To see the full list of analyst forecasts on Power Corp of Canada stock, see the TSE:POW Stock Forecast page.

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.