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Power Corporation of Canada's Paul Desmarais Jr., chairman and co-chief executive officer checks his watch prior to their annual meeting in Montreal, May 13, 2011. (CHRISTINNE MUSCHI/REUTERS)
Power Corporation of Canada's Paul Desmarais Jr., chairman and co-chief executive officer checks his watch prior to their annual meeting in Montreal, May 13, 2011. (CHRISTINNE MUSCHI/REUTERS)

Stock Pick

This model ranks Power Corp. among the best stocks in Canada Add to ...

Validea’s pick of the week provides a detailed report on a company that scores well in the stock-screening service’s model portfolios. On Validea.ca, investors can analyze 1,000 Canadian stocks through 12 different guru-based models and get individual reports on each company. Globe Investor has a distribution agreement with Validea.ca. Try it. This is the last week of a promotion that lets Globe readers get a 25-per-cent discount.

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Montreal-based Power Corporation of Canada (market cap $11-billion) is a diversified international management and holding company with interests the financial services, communications and other business sectors in North America, Europe and Asia.

Fourth-quarter earnings announcement hurt shares recently, but that made valuations very attractive for a solid business.

Recently upgraded by Joel Greenblatt-based model as the No. 1 stock in Canadian market based on the combined earnings yield and return on total capital ranking.

Also gets strong interest from James O’Shaughnessy-based value model because of size ($33-billion in trailing 12-month sales), $11.38 in cash flow per share, and 4.3 per cent dividend yield.

Other strong points:

  • Has price/sales ratio of just 0.33
  • Sells for just 0.43 times book value
  • Debt/equity ratio is a reasonable 26 per cent

 

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