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PWF.TO - Power Financial Corporation

Discussion in 'Canadian Stocks Message Boards' started by Marvan, Aug 14, 2019.

  1. Marvan

    Marvan Active Member

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    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.

    http://www.powerfinancial.com
     
  2. Marvan

    Marvan Active Member

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  3. Marvan

    Marvan Active Member

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    How Do You Calculate Power Financial's P/E Ratio?

    Price to Earnings Ratio = Price per Share ÷ Earnings per Share (EPS)

    Or for Power Financial:

    P/E of 10.25 = CA$28.85 ÷ CA$2.81 (Based on the trailing twelve months to June 2019.)

    Is A High P/E Ratio Good?
    The higher the P/E ratio, the higher the price tag of a business, relative to its trailing earnings. All else being equal, it's better to pay a low price -- but as Warren Buffett said, 'It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.'

    Does Power Financial Have A Relatively High Or Low P/E For Its Industry?
    We can get an indication of market expectations by looking at the P/E ratio. If you look at the image below, you can see Power Financial has a lower P/E than the average (12.2) in the insurance industry classification.

    [​IMG]
    TSX:pWF Price Estimation Relative to Market, September 9th 2019

    if insiders are buying shares, because that might imply they believe the stock is undervalued.">This suggests that market participants think Power Financial will underperform other companies in its industry. Since the market seems unimpressed with Power Financial, it's quite possible it could surprise on the upside. It is arguably worth checking if insiders are buying shares, because that might imply they believe the stock is undervalued.

    How Growth Rates Impact P/E Ratios
    Probably the most important factor in determining what P/E a company trades on is the earnings growth. Earnings growth means that in the future the 'E' will be higher. That means unless the share price increases, the P/E will reduce in a few years. A lower P/E should indicate the stock is cheap relative to others -- and that may attract buyers.

    Power Financial increased earnings per share by 3.9% last year. And earnings per share have improved by 1.9% annually, over the last three years.

    A Limitation: P/E Ratios Ignore Debt and Cash In The Bank
    Don't forget that the P/E ratio considers market capitalization. That means it doesn't take debt or cash into account. In theory, a company can lower its future P/E ratio by using cash or debt to invest in growth.

    While growth expenditure doesn't always pay off, the point is that it is a good option to have; but one that the P/E ratio ignores.

    Power Financial's Balance Sheet
    Power Financial has net debt equal to 50% of its market cap. While it's worth keeping this in mind, it isn't a worry.

    The Bottom Line On Power Financial's P/E Ratio
    Power Financial's P/E is 10.3 which is below average (13.8) in the CA market. EPS grew over the last twelve months, and debt levels are quite reasonable. If growth is sustainable over the long term, then the current P/E ratio may be a sign of good value.

    https://finance.yahoo.com/news/know-power-financial-corporations-tse-132019701.html
     
  4. Marvan

    Marvan Active Member

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    CAD 31.00

    Out
     

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