POWER CORP CDA  (POW) and POWER FINANCIAL (PWF)

POWER CORP CDA  (POW) and POWER FINANCIAL (PWF) recently traded at $32.47 and $35.67 respectively on the Toronto Stock Exchange, not far above their lows for the last 12 months. Both of these companies are of high quality, low risk “blue chip “ investments providing dividends close to 4% at current market prices. Power Corporation is a holding company, owning a major share of Power Financial.

Some management background:

• Senior management and substantial shareholders include members of the highly respected Desmarais Family in both Quebec, where the head offices are located, and in the rest of Canada. Paul Desmarais, Jr. is Chairman and Co-Chief Executive Officer and André Desmarais is Deputy Chairman, President and Co-Chief Executive Officer.

Power Corporation holds interests, directly or indirectly, in companies that are active in the financial services, communications and other business sectors. In particular, Great-West Life (GWO), IGM Financial (TSX:IGM) and Power Financial Corp. (TSX:PWF) are all part of Power Corporation. Further, Power Corporation’s Gesca subsidiary is one-third owner of The Canadian Press.

While Power Corporation’s financial performance these past months has been extremely disappointing the outlook appears to be promising. In particular, with anticipated higher interest rates, the earnings of Great West Life should show significant improvement.. A dividend increase in the following 12 months for both Power and Power Financial would not surprise people.

As a conservative low risk investment, both Power And Power Financial should be of interest.

-M