Power Corporation of Canada Fundamental Analysis (TSX: POW.TO)
Power Corporation of Canada Fundamental Analysis (TSX: POW.TO)
Power Corporation of Canada (TSX: POW.TO) shows moderate financial fundamentals with a PE ratio of 22.28, profit margin of 7.72%, and ROE of 10.91%. The company generates $35.1B in annual revenue with strong year-over-year growth of 14.19%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 57.6/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze POW.TO's fundamental strength across five key dimensions:
Efficiency Score
WeakPOW.TO struggles to generate sufficient returns from assets.
Valuation Score
ExcellentPOW.TO trades at attractive valuation levels.
Growth Score
ModeratePOW.TO shows steady but slowing expansion.
Financial Health Score
ModeratePOW.TO shows balanced financial health with some risks.
Profitability Score
WeakPOW.TO struggles to sustain strong margins.
Key Financial Metrics
Is POW.TO Expensive or Cheap?
P/E Ratio
POW.TO trades at 22.28 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, POW.TO's PEG of -5.61 indicates potential undervaluation.
Price to Book
The market values Power Corporation of Canada at 2.30 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 7.80 times EBITDA. This is generally considered low.
How Well Does POW.TO Make Money?
Net Profit Margin
For every $100 in sales, Power Corporation of Canada keeps $7.72 as profit after all expenses.
Operating Margin
Core operations generate 45.64 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $10.91 in profit for every $100 of shareholder equity.
ROA
Power Corporation of Canada generates $0.26 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Power Corporation of Canada produces operating cash flow of $5.67B, showing steady but balanced cash generation.
Free Cash Flow
Power Corporation of Canada generates strong free cash flow of $5.07B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $7.97 in free cash annually.
FCF Yield
POW.TO converts 8.61% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
22.28
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-5.61
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.30
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.67
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.88
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.71
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.11
vs 25 benchmark
ROA
Return on assets percentage
0.003
vs 25 benchmark
ROCE
Return on capital employed
0.02
vs 25 benchmark
How POW.TO Stacks Against Its Sector Peers
| Metric | POW.TO Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 22.28 | 21.03 | Neutral |
| ROE | 10.91% | 647.00% | Weak |
| Net Margin | 7.72% | -1591.00% (disorted) | Weak |
| Debt/Equity | 0.88 | 0.90 | Neutral |
| Current Ratio | 0.71 | 912.43 | Weak Liquidity |
| ROA | 0.26% | -579.00% (disorted) | Weak |
POW.TO outperforms its industry in 0 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Power Corporation of Canada's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
-41.13%
Industry Style: Value, Dividend, Cyclical
DecliningEPS CAGR
29.72%
Industry Style: Value, Dividend, Cyclical
High GrowthFCF CAGR
-52.19%
Industry Style: Value, Dividend, Cyclical
Declining