July 27, 2023
Top 10 Stock Power Corporation Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Power Corporation – Top 10 Stock in Toronto Stock Exchange Index TSX Composite
Power Corporation is listed as a top 10 stock on July 27, 2023 in the market index TSX Composite because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low, despite a currently slow growth momentum. Based on the Obermatt 360° View of 94 (top 94% performer), Obermatt assesses an overall strong buy recommendation for Power Corporation on July 27, 2023.
Snapshot: Obermatt Ranks
| Country | Canada |
| Industry | Life & Health Insurance |
| Index | Renewables Users, TSX Composite |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Power Corporation Strong Buy
| 360 METRICS | July 27, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 94 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 45 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 79 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 74 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 94 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 94 (better than 94% compared with alternatives) for 2022, overall professional sentiment and financial characteristics for the stock Power Corporation are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for Power Corporation. The consolidated Value Rank has an attractive rank of 94, which means that the share price of Power Corporation is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 94% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 79. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 74. But the consolidated Growth Rank has a low rank of 45, which means that the company is below average in terms of growth and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 55 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 94, Power Corporation is better positioned than 94% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 94), secure financing practices (Safety Rank of 79), and positive market sentiment in the professional investor community (Sentiment Rank of 74). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company’s growth expectations are below the industry average (Growth Rank of 45), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good Value Rank could indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of Power Corporation is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Power Corporation positive
ANALYSIS: With an Obermatt Sentiment Rank of 74 (better than 74% compared with alternatives), overall professional sentiment and engagement for the stock Power Corporation is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Power Corporation. Analyst Opinions are at a rank of 28 (worse than 72% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 50, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Power Corporation. Even better, the Professional Investors rank is 92, meaning that professional investors hold more stock in this company than in 92% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 77, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 77% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 74 (more positive than 74% compared with investment alternatives), Power Corporation has a reputation among professional investors that is above-average compared with that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more
Value Strategy: Power Corporation Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 94 (better than 94% compared with alternatives) for 2022, Power Corporation shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Power Corporation. Price-to-Sales is 93 which means that the stock price compared with what market professionals expect for future sales is lower than for 93% of comparable companies, indicating a good value for Power Corporation's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 56% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 62. Compared with other companies in the same industry, dividend yields of Power Corporation are expected to be higher than for 98% of all competitors (a Dividend Yield rank of 98). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 94, is a buy recommendation based on Power Corporation's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Power Corporation based on its detailed value metrics.
Growth Strategy: Power Corporation Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 45 (better than 45% compared with alternatives), Power Corporation shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, where half of the indicators are below and half above average for Power Corporation. Profit Growth, with a rank of 65 (better than 65% of its competitors), and Capital Growth, with a rank of 59, are both positive, which is a healthy sign for positive development. But Sales Growth has only a rank of 5, which means that, currently, professionals expect the company to grow less than 95% of its competitors, and Stock Returns are at a rank of 47. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 45, is a hold recommendation for growth and momentum investors. Stock returns that are a thing of the past can be less of a problem. Below-average revenue growth may be caused by divestments of underperforming businesses. If that is the case, then the positive developments of profit and capital growth are signs of a company with growth potential. If these are the reasons, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Power Corporation Debt Financing Safety very solid
| SAFETY METRICS | July 27, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 41 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 100 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 50 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 79 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 79 (better than 79% compared with alternatives) for 2022, the company Power Corporation has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Power Corporation is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Power Corporation. Refinancing is at 100, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 100% of its competitors. Liquidity is also good at 50, meaning the company generates more profit to service its debt than 50% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 41, which means the company has an above-average debt-to-equity ratio. It has more debt than 59% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 79 (better than 79% compared with alternatives), Power Corporation has a financing structure that is significantly safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Power Corporation could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: Power Corporation Above-Average Financial Performance
| COMBINED PERFORMANCE | July 27, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 94 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 45 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 50 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 72 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 72 (better than 72% compared with investment alternatives), Power Corporation (Life & Health Insurance, Canada) shares have above-average financial characteristics compared with similar stocks. Shares of Power Corporation are a good value (attractively priced) with a consolidated Value Rank of 94 (better than 94% of alternatives), are safely financed (Safety Rank of 79, which means low debt burdens), but show below-average growth (Growth Rank of 45). ...read more
RECOMMENDATION: A Combined Rank of 72, is a buy recommendation based on Power Corporation's financial characteristics. As the company Power Corporation's key financial metrics exhibit good value (Obermatt Value Rank of 94) but low growth (Obermatt Growth Rank of 45) while being safely financed (Obermatt Safety Rank of 79), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 94% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. ...read more
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.