Power’s high dividend is sustainable

Article Excerpt

POWER CORP. $30 (Toronto symbol POW; Conservative-Growth Dividend Payer Portfolio, Finance sector; Shares outstanding: 376.6 million; Market cap: $11.3 billion; Dividend yield: 5.4%; Dividend Sustainability Rating: Above Average; www.powercorporation.com) is a holding company with a diversified list of businesses. It holds its financial assets through its 65.6%-owned Power Financial. The company last raised its quarterly dividend by 6.0% with the June 2019 payment. Investors now receive $0.405 a share instead of $0.382. The new annual rate of $1.62 yields a high 5.4%. Thanks to higher earnings from its financial businesses, earnings in the second quarter of 2019 rose 7.2%, to $372 million from $347 million a year earlier. Due to fewer shares outstanding, per-share earnings jumped 14.7%, to $0.86 from $0.75. Power Corp. is a buy. buy…