Power Corp of Canada
Is it a good company at a reasonable price? This company is doing fine. It is a good dividend paying stock and I will continue to hold the shares that I have. However, I think at the moment, the stock price is too high. If you overpay for a stock, it can affect badly your long term total return. I think that currently it is testing as too expensive.
I own this stock of Power Corp of Canada (TSX-POW, OTC-PWCDF). I started following this stock because it was on the Dividend Achievers, the Dividend Aristocrats lists and also on Mike Higgs’ list. It is a stock that I notice has been recommended lately as good value (October 2008). I got shares in this company when in 2020 Power Corp reorganized and gave out Power Corp Shares to replace Power Financial Shares.
When I was updating my spreadsheet, I noticed I have made a total return of 9.71% with 5.95% from capital gains and 3.76% from dividends. I am looking at my Power Financial shares and Power Corp shares.
If you had invested in this company in December 2015, for $1,012.90 you would have bought 26 shares at $28.94 per share. In December 2025, after 10 years you would have received $630.97 in dividends. The stock would be worth $2,553.25. Your total return would have been $3,184.22. This would be a total return of 13.77% per year with 9.69% from capital gain and 4.08% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $28.94 | $1,012.90 | 35 | 10 | $630.97 | $2,553.25 | $3,184.22 |
The current dividend yield is moderate with dividend growth low. The current dividend yield is moderate (2% to 4% ranges) at 3.26%. The 5 and 10 year median dividend yield is good (5% to 6% range) at 5.28% and 5.32%. The historical median dividend yield is moderate at 2.82%. The dividend growth is low (below 8% per year) at 6.6% per year over the past 5 years. The last dividend increase was in 2026 and it was for 9%.
The Dividend Payout Ratios (DPR) are generally good. The DPR for 2025 for Earnings per Share (EPS) is too high at 61% with 5 year coverage at 57%. The DPR for 2025 for Adjusted Earnings per Share (AEPS) is good at 45% with 5 year coverage at 49%. The DPR for 2025 for Cash Flow per Share (CFPS) is too high at 83% with 5 year coverage at very good at 1314%. The DPR for 2025 for Free Cash Flow (FCF) is good at 38% with 5 year coverage at 25%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 60.91% | 56.50% |
| AEPS | 45.20% | 49.36% |
| CFPS | 83.37% | 13.17% |
| FCF | 38.34% | 25.16% |
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2025 is fine at 5.43 and currently at 4.82. However, we need also to look at the Long Term Debt/Covering Assets Ratio for 2025 which is good at 0.89 and currently at 0.89 because this is a more important ratio for a Financial. The Liquidity Ratio for 2025 is good at 2.67 and 2.67 currently. But this is not an important ratio for a financial. The Debt Ratio for 2025 is fine for a financial at 1.05 and 1.05 currently. Financial Leverage is also fine at 29% and 29% currently.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R+A | 0.89 | 0.89 |
| Lg Term R | 5.43 | 4.82 |
| Intang/GW | 0.47 | 0.42 |
| Liquidity | 2.67 | 2.67 |
| Liq. + CF | 2.97 | 3.15 |
| Debt Ratio | 1.05 | 1.05 |
| Financial Lev | 29% | 29% |
The Total Return per year is shown below for years of 5 to 38 to the end of 2025. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2020 | 5 | 6.55% | 25.12% | 20.07% | 5.05% |
| 2015 | 10 | 6.97% | 13.77% | 9.69% | 4.08% |
| 2010 | 15 | 4.97% | 10.25% | 6.68% | 3.57% |
| 2005 | 20 | 6.75% | 7.20% | 4.26% | 2.94% |
| 2000 | 25 | 8.86% | 8.76% | 5.64% | 3.12% |
| 1995 | 30 | 9.81% | 13.84% | 9.17% | 4.67% |
| 1990 | 35 | 10.04% | 12.47% | 8.65% | 3.82% |
| 1987 | 38 | 9.55% | 11.67% | 8.27% | 3.40% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 9.93, 10.85 and 11.76. The corresponding 10 year ratios are 9.80, 11.03 and 11.93. The corresponding historical ratios are 10.52, 12.34 and 13.79. The current ratio is 13.64 based on a stock price of $81.82 and EPS estimate for 2026 of $6.00. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I also have Adjusted Earning per Share (AEPS) data. The 5-year low, median, and high median Price/Earnings per Share Ratios are 7.89, 9.15 and 10.41. The corresponding 10 year ratios are 7.89, 9.18 and 11.04. The corresponding historical ratios are 8.97, 10.92 and 11.98. The current ratio is 13.57 based on a stock price of $81.82 and EPS estimate for 2026 of $6.03. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $70.18. The 10-year low, median, and high median Price/Graham Price Ratios are 0.58, 0.65 and 0.76. The current ratio is 1.17 based on a stock price of $81.82. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Book Value per Share Ratio of 1.06. The current ratio is 2.25 based on a stock price of $81.82, Book Value of $54,431M, and Book Value per Share of 2.25. The current ratio is 113% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Cash Flow per Share Ratio of 2.17. The current ratio is 7.50 based on Cash Flow for the last 12 months of $6,935M, Cash Flow per Share of $10.91 and a stock price of $81.82. The current ratio is 246% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
get an historical median dividend yield of 2.82%. The current dividend yield is 3.26% based on dividends of $2.67 and a stock price of $81.82. The current dividend yield is 16% above the 10 year dividend yield. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median dividend yield of 5.32%. The current dividend yield is 3.26% based on dividends of $2.67 and a stock price of $81.82. The current dividend yield is 39% below the historical dividend yield. This stock price testing suggests that the stock price is relatively expensive.
The 10-year median Price/Sales (Revenue) Ratio is 0.36. The current ratio is 1.11 based on Revenue estimate for 2026 of $46,685M, Revenue per Share of $73.72 and a stock price of $81.82. The current ratio is 211% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
Results of stock price testing is that the stock price is probably expensive. I give it a Hold. The 10 year median dividend yield test says this and it is confirmed by the P/S Ratio test. Most of the rest of the tests are saying the same thing.
When I look at analysts’ recommendations, I find Buy (3), Hold (5), and Sell (1). The consensus is a Hold. The 12 month stock price consensus is $82.56 with a High of $90.00 and low of $58.00. The consensus stock price of $82.56 implies a total return of 4.41% with 0.90% from capital gains and 3.26% from dividends based on a current stock price of $82.56.
There are a lot of entries on Stock Chase for 2026. They vary from Do Not Buy to Buy. Some like other companies better. Some mentioned they do not like mutual fund companies and Power Corp holds IFM. Some think it is getting too pricy. Others say the new management is giving the stock a new lease on life. Lots of various opinions. Amy Legate-Wolfe on Motley Fool thinks you should buy for rising dividends. She thinks the price is currently reasonable. Puja Tayal on Motley Fool thinks you should buy this to generate passive income. The company put out a Press Release about its fourth quarter of 2025 results. The company put out a Press Release about their first quarter of 2026.
Simply Wall Street via Yahoo Finance reviews this stock. They talk about the fact that some people think the stock is overvalued and others think it is undervalued. Simply Wall Street lists no warnings for this company.
Power Corp. of Canada is a holding company with controlling interests in Great-West Lifeco (one of the big three Canadian life insurers), IGM Financial (Canada’s largest nonbank asset manager), and other alternative asset management platforms (Sagard and Power Sustainable). The company also has minority interests in Groupe Bruxelles Lambert, a holding company with interests in European firms. Its web site is here Power Corp of Canada.
The last stock I wrote about was about was McCoy Global Inc (TSX-MCB, OTC-MCCRF) … learn more. The next stock I will write about will be Mullen Group Ltd (TSX-MTL, OTC-MLLGF) … learn more on Wednesday, May 27, 2026 around 5 pm. Tomorrow on my other blog I will write about Behavioural Investment…. learn more on Tuesday, May 26, 2026 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
