TSX:PWF

Stock Analysis Report

Executive Summary

Power Financial Corporation provides financial services in Canada, the United States, Europe, and Asia.


Snowflake Analysis

Undervalued established dividend payer.


Similar Companies

Share Price & News

How has Power Financial's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: PWF has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

2.1%

PWF

4.8%

CA Insurance

6.3%

CA Market


1 Year Return

30.0%

PWF

-15.8%

CA Insurance

-19.7%

CA Market

Return vs Industry: PWF exceeded the Canadian Insurance industry which returned 24.9% over the past year.

Return vs Market: PWF exceeded the Canadian Market which returned 8.2% over the past year.


Shareholder returns

PWFIndustryMarket
7 Day2.1%4.8%6.3%
30 Day5.9%-10.9%-5.3%
90 Day9.9%-25.1%-20.3%
1 Year37.7%30.0%-11.9%-15.8%-17.0%-19.7%
3 Year20.4%2.1%-3.4%-14.7%-7.9%-16.5%
5 Year25.4%-3.1%4.3%-14.2%3.7%-11.8%

Price Volatility Vs. Market

How volatile is Power Financial's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Power Financial undervalued compared to its fair value and its price relative to the market?

21.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PWF (CA$36.34) is trading below our estimate of fair value (CA$46.5)

Significantly Below Fair Value: PWF is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: PWF is good value based on its PE Ratio (12.3x) compared to the Insurance industry average (15.6x).

PE vs Market: PWF is good value based on its PE Ratio (12.3x) compared to the Canadian market (16.1x).


Price to Earnings Growth Ratio

PEG Ratio: PWF is poor value based on its PEG Ratio (1.9x)


Price to Book Ratio

PB vs Industry: PWF is good value based on its PB Ratio (1.4x) compared to the CA Insurance industry average (1.4x).


Next Steps

Future Growth

How is Power Financial forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

6.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PWF's forecast earnings growth (6.6% per year) is above the savings rate (1.4%).

Earnings vs Market: PWF's earnings (6.6% per year) are forecast to grow slower than the Canadian market (11.2% per year).

High Growth Earnings: PWF's earnings are forecast to grow, but not significantly.

Revenue vs Market: PWF's revenue (11.8% per year) is forecast to grow faster than the Canadian market (5.1% per year).

High Growth Revenue: PWF's revenue (11.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PWF's Return on Equity is forecast to be low in 3 years time (14.6%).


Next Steps

Past Performance

How has Power Financial performed over the past 5 years?

-2.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PWF has high quality earnings.

Growing Profit Margin: PWF's current net profit margins (4.2%) are higher than last year (4.1%).


Past Earnings Growth Analysis

Earnings Trend: PWF's earnings have declined by -2% per year over the past 5 years.

Accelerating Growth: PWF's earnings growth over the past year (2.5%) exceeds its 5-year average (-2% per year).

Earnings vs Industry: PWF earnings growth over the past year (2.5%) exceeded the Insurance industry -0.4%.


Return on Equity

High ROE: PWF's Return on Equity (10%) is considered low.


Next Steps

Financial Health

How is Power Financial's financial position?


Financial Position Analysis

Short Term Liabilities: PWF's short term assets (CA$127.7B) exceed its short term liabilities (CA$6.9B).

Long Term Liabilities: PWF's short term assets (CA$127.7B) do not cover its long term liabilities (CA$426.7B).


Debt to Equity History and Analysis

Debt Level: PWF's debt to equity ratio (47.9%) is considered high.

Reducing Debt: PWF's debt to equity ratio has increased from 47.5% to 47.9% over the past 5 years.

Debt Coverage: PWF's debt is well covered by operating cash flow (44.5%).

Interest Coverage: PWF's interest payments on its debt are well covered by EBIT (10.8x coverage).


Balance Sheet


Next Steps

Dividend

What is Power Financial's current dividend yield, its reliability and sustainability?

5.01%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: PWF's dividend (5.01%) is higher than the bottom 25% of dividend payers in the Canadian market (1.88%).

High Dividend: PWF's dividend (5.01%) is low compared to the top 25% of dividend payers in the Canadian market (5.34%).


Stability and Growth of Payments

Stable Dividend: PWF's dividends per share have been stable in the past 10 years.

Growing Dividend: PWF's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (60.9%), PWF's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: PWF's dividends in 3 years are forecast to be covered by earnings (52% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

7.8yrs

Average management tenure


CEO

Robert Orr (60yo)

14.75s

Tenure

CA$12,600,072

Compensation

Mr. Robert Jeffrey Orr, also known as Jeff, serves as the Chief Executive Officer and President at Power Financial Corporation since May 9, 2005. Mr. Orr served as the President and Chief Executive Officer ...


CEO Compensation Analysis

Compensation vs Market: Robert's total compensation ($USD9.50M) is above average for companies of similar size in the Canadian market ($USD6.83M).

Compensation vs Earnings: Robert's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
André Desmarais
Executive Co-Chairman of the Board11.75yrsCA$4.02m0.0065% CA$1.6m
Paul Desmarais
Executive Co-Chairman of the Board12.08yrsCA$3.39mno data
Robert Orr
President14.75yrsCA$12.60m0.060% CA$14.6m
Gregory Tretiak
Executive VP & CFO7.75yrsCA$2.58mno data
Claude Généreux
Executive Vice President4.92yrsCA$4.34mno data
Richard Pan
Head of Corporate Finance & VPno datano datano data
Stéphane Lemay
VP, General Counsel & Secretary7.5yrsno datano data
Michel Plessis-Bélair
Vice-Chairman7.75yrsCA$58.00k0.00090% CA$217.4k
Jocelyn Lefebvre
Managing Director of Power Financial Europe BV & Parjointco N.V.1.83yrsno datano data
Amaury-Daniel de Seze
Vice-Chairman9.75yrsCA$683.35k0.0018% CA$437.3k

7.8yrs

Average Tenure

62yo

Average Age

Experienced Management: PWF's management team is seasoned and experienced (7.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
André Desmarais
Executive Co-Chairman of the Board11.75yrsCA$4.02m0.0065% CA$1.6m
Paul Desmarais
Executive Co-Chairman of the Board12.08yrsCA$3.39mno data
Robert Orr
President14.75yrsCA$12.60m0.060% CA$14.6m
Anthony Richard Graham
Independent Director18.75yrsCA$142.00kno data
John David Jackson
Lead Director2.08yrsCA$172.75k0.00068% CA$164.3k
Baron Frère
Independent Director29.75yrsCA$149.00kno data
Marc Bibeau
Independent Director10.75yrsCA$148.50kno data
Emoke Jolan Szathmáry
Independent Director20.75yrsCA$150.50k0.00045% CA$108.7k
Thomas Ryan
Independent Director5.75yrsCA$172.75k0.0026% CA$630.6k
Gary Doer
Independent Director3.75yrsCA$203.75kno data

11.9yrs

Average Tenure

66.5yo

Average Age

Experienced Board: PWF's board of directors are seasoned and experienced ( 11.9 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Power Financial Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Power Financial Corporation
  • Ticker: PWF
  • Exchange: TSX
  • Founded: 1984
  • Industry: Life and Health Insurance
  • Sector: Insurance
  • Market Cap: CA$24.160b
  • Shares outstanding: 664.10m
  • Website: https://www.powerfinancial.com

Number of Employees


Location

  • Power Financial Corporation
  • 751 Victoria Square
  • Montréal
  • Quebec
  • H2Y 2J3
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
PWFTSX (The Toronto Stock Exchange)YesCommon SharesCACADOct 1984
PWFDB (Deutsche Boerse AG)YesCommon SharesDEEUROct 1984
POFN.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDOct 1984
PWF.PRLTSX (The Toronto Stock Exchange)PFD 1ST L 5.10CACADAug 2006
PWF.PRPTSX (The Toronto Stock Exchange)1ST PFD P 4.4%CACADJun 2010
PWF.PRSTSX (The Toronto Stock Exchange)1ST PFD SER 4.8%CACADFeb 2013
PWF.PRTTSX (The Toronto Stock Exchange)1ST PFD 4.2%-TCACADDec 2013
PWF.PRQTSX (The Toronto Stock Exchange)PFD SHS SER QCACADFeb 2016
PWF.PRZTSX (The Toronto Stock Exchange)1ST PFD SER VCACADMay 2017

Biography

Power Financial Corporation provides financial services in Canada, the United States, Europe, and Asia. It offers life, disability, critical illness, and health insurance products, as well as wealth savings and income products, and specialty products. The company also provides financial products, including employer-sponsored defined contribution plans, individual retirement accounts, enrollment services, communication materials, investment options and education services, fund management services, and investment and advisory services. In addition, it offers protection and wealth management products, such as payout annuity products; reinsurance products; and sub-advisory services. Further, the company provides mutual funds, pooled funds, segregated funds, separate accounts, and other investment vehicles; securities, mortgages, and other financial services; and investment management services. It offers its products primarily through distribution network of third-party financial advisors, consultants, and independent financial advisors. The company was founded in 1984 and is based in Montréal, Canada. Power Financial Corporation is a subsidiary of Power Corporation of Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/13 23:45
End of Day Share Price2020/02/13 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.