Power Corporation $40.52 – Toronto symbol POW

POWER CORPORATION $40.52 (Toronto symbol POW; SI Rating: Above average) is a diversified holding company. Power Corp., founded in the 1920s to develop hydroelectric power, now controls one of Canada’s largest mutual-fund companies, IGM Financial, and Great- West Lifeco, one of the largest life insurers. Power Financial, 66.4% held, is a holding company for Power Corp.'s financial assets, including 72.9% of Great-West Lifeco and 58.4% of IGM Financial. As well, Power Financial holds 50% of Parjointco, which in turn owns a 54.3% interest in Swiss-listed Pargesa Holdings SA. Pargesa has 95% of its assets in five large European companies: Imerys (minerals processing), Total SA (world’s fourth-largest oil firm), Pernod Ricard (wine and spirits), Suez (energy, water and waste services) and Lafarge SA (cement and building materials.) Power Corp. also owns 100% of Gesca Ltée, which publishes Montreal’s La Presse and six other daily newspapers. In the three months ended June 30, 2007, Power Corp.'s earnings rose 16.1%, to $396 million or $0.85 a share, from $341 million or $0.73 a share. Great-West Lifeco contributed $255 million to Power Corp.'s earnings and IGM Financial contributed $81 million. In June, 2007, Power Corp. raised its annual dividend rate by 22.2%, to $0.965 from $0.79. Its shares currently yield 2.4%. Power Corp. now trades at only 12 times earnings. Power Corp. is still a safety-conscious buy.

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