When markets are unpredictable and concerns are running high, it’s natural for investors to look for deals. A recent BMO survey showed that from March to April 2025, Canadian financial anxiety spiked sharply. Concerns about inflation rose by 16 points to 76%, and nearly 60% of Canadians said they were more worried about their personal financial situations. In this climate, investors might be wondering if it’s time to add more stability to their portfolios. That’s where a company like Power Corporation of Canada (TSX:POW) comes in.
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About Power
Power is a holding company with a strong presence in financial services. Through its subsidiaries, including Power Financial, it controls major interests in Great-West Lifeco, IGM Financial, and Wealthsimple. These businesses cover insurance, investment management, and fintech. That kind of diversity offers built-in risk management, especially in uncertain times like now.
As of writing, the stock trades at around $53 per share, which is down slightly from recent highs. This brings its dividend yield to about 4.6%, which is an attractive level for income-focused investors. What makes it more appealing is that the payout appears well covered by earnings. In its most recent earnings report, Power posted net earnings of $702 million for the first quarter of 2025, or $1.22 per share. That’s up from $595 million, or $0.89 per share, a year earlier. Revenues were also up 4.4% to $9.36 billion.
A lot of that strength came from solid results across its key businesses. Great-West Lifeco reported strong sales growth, particularly in its wealth and retirement segments. IGM Financial also performed well, with assets under management rising and earnings per share increasing. Together, these divisions continue to contribute consistent income to Power’s bottom line.
More to come
The company has also done a good job cleaning up its structure in recent years. In 2020, it streamlined operations, collapsing the dual holding structure between Power and Power Financial. That move improved transparency, lowered costs, and gave shareholders more direct exposure to the underlying businesses. It also positioned the Canadian stock to focus more aggressively on higher-growth areas like digital investing and retirement services.
From a valuation perspective, Power looks reasonably priced. It trades at about 12.6 times forward earnings, which is below the average for the TSX and well below many growth-oriented financial stocks. Its price-to-book ratio is also modest, especially considering the quality of its holdings. This suggests investors might be underestimating its long-term potential, possibly due to the perception that it’s a slow-moving, old-school financial player.
But the company has been evolving. Its investment in Wealthsimple adds some fintech exposure, and it’s been expanding retirement offerings through Great-West Lifeco. These areas should benefit from demographic trends like aging populations and the increasing demand for online investment tools. So, while Power still offers the kind of dividend stability that older investors want, it also has growth potential that can appeal to younger investors, too.
Bottom line
There are still risks. The economy remains uncertain, interest rate shifts could impact investment income, and equity market volatility may weigh on wealth management fees. But Power has the size, scale, and financial discipline to ride out most market cycles. It has also proven that it can adapt and focus on long-term growth. Plus, an investment of $7,000 could bring in $325 in annual dividends!
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| POW | $52.39 | 133 | $2.45 | $325.85 | Quarterly | $6,967.87 |
In a time when Canadians are increasingly concerned about inflation, recession, and financial instability, Power stands out as a stock that can help anchor a portfolio. The dividend is generous and reliable, the valuation is attractive, and the underlying businesses are strong. For investors with a long-term view, picking up shares while they’re below recent highs could turn out to be a smart move.
