Power Results Met With an Icy Reception

It’s a safe bet the Desmarais family isn’t losing sleep over weaker than expected results out of its two holding companies. You shouldn’t either.

| More on:
The Motley Fool

There was plenty of weakness across the S&P/TSX Composite on Wednesday, as the Canadian market fell by slightly more than 1%.

Two names that typically don’t show up on a “worst of” list but were significant negative contributors to today’s decline are Power Corporation (TSX:POW) and Power Financial (TSX:PWF).  The stocks were down by about 3% as both companies reported lower than expected results.


The table below contains a snapshot of each company’s results.  Clearly, 2012 was a challenging year as low-interest rates and wonky equity markets continue to weigh on the financial subsidiaries embedded within these holding companies.

Operating Earnings

Net Income







Power Corp.







Power Fin’l







Source:  Company reports

Worry?  Who us?

You’d be hard pressed to find an entity outside of Omaha, Nebraska that could care less about quarterly results than the Desmarais family controlled Power Group.  Today’s earnings release makes no mention of a conference call to discuss the results and is void of any commentary.

The Power Group invests for the long-term and doesn’t let quarterly fluctuations distract them from their objective of owning companies that have a proven ability to dominate.

Their patience and focused strategy has paid off, especially for long-term shareholders.  The table below outlines the total returns provided by both Power Corp. and Power Financial over several historical periods.  With dividends included, these companies just don’t lose to the Canadian market.





2 Year




5 Year




10 Year




20 Year




Source:  Capital IQ

The Foolish Bottom Line

Companies like Power Corp. and Power Fin are somewhat rare on the Canadian landscape.  These are companies that you can essentially buy and forget about.  Sure they’ll have days like today, but over the long-term, odds are that you’ll be well served by having one (or both) of them in your portfolio.

We have created a special report that identifies several other Canadian companies that have similar buy and forget characteristics.  To find out who these companies are, simply click here and the report will be delivered to your inbox, absolutely free!   

Follow us on Twitter and Facebook for the latest in Foolish investing.

Fool contributor Iain Butler does not own shares in any of the companies mentioned in this report at this time.  The Motley Fool has no positions in the stocks mentioned above.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

More on Investing

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept

3 Roaring Stocks to Hold for the Next 20 Years

Given their long-term growth potential, these three outperforming stocks could continue their uptrends.

Read more »

stock data
Stocks for Beginners

1 Stock to Steer Clear of

TFI stock (TSX:TFII) has seen shares drop by 18% after earnings, but unfortunately it doesn't look like the first quarter…

Read more »

edit Sale sign, value, discount

Have $500? 3 Absurdly Cheap Stocks Long-Term Investors Should Buy Right Now

Given their healthy long-term growth prospects and cheaper valuations, these three TSX stocks could deliver superior returns in the long…

Read more »

A bull outlined against a field
Stocks for Beginners

2 Top Bargain Stocks Ready for a Bull Run

These two top Canadian stocks look undervalued right now but might not remain cheap for very long.

Read more »

A close up image of Canadian $20 Dollar bills
Dividend Stocks

2 TSX Dividend Stocks With Yields Above 7% That You Can Buy With $100

Here are two high-yielding TSX dividend stocks you can buy with less than $100 per share today and hold for…

Read more »

oil and gas pipeline
Dividend Stocks

Should You Buy Enbridge Stock on a Pullback?

Down 25% from all-time highs, Enbridge stock remains a top investment choice due to its diversified business and steady cash…

Read more »

A airplane sits on a runway.

3 Things to Know About Air Canada Stock Before You Buy

Air Canada stock continues to hover below $20 despite the sharp rise in travel demand seen across the industry. What's…

Read more »

Money growing in soil , Business success concept.

2 TSX Stocks That Doubled Investors’ Money Within 5 Years

Analysts think these two stocks are fairly valued.

Read more »