Power Corporation of Canada (“POW” or “the Company”) operates within financial services, which is a sector that has experienced economic downturn as a result of the Covid-19 pandemic. Where the likes of banks have been particularly pressured when droves of customers have, at once, been unable to make good on their loan agreements, for example, forcing them to carry the debt burden further such as by cutting credit card rates and deferring payments, POW has the relative advantage of being able to broaden its customer base by operating in specialized fields that include insurance, retirement, and wealth management via several subsidiaries.
In other words, it’s through the power of diversification, as well as being a respected leader in its field, that POW can look to emerge throughout the turmoil in solid financial shape.
➤ Key Factors: The pandemic has affected all businesses that operate in the physical world, and the financial services industry is no exception, though companies like POW have at least benefited from being able to serve many of its customers digitally, which directly helps in limiting the pandemic spread, in conjunction with adhering strongly to numerous advisable relief measures applicable to employees who still need to be present in person to serve the customer.
➤ Financial Stress Test: POW has great financials, to the extent that the Company can be viewed as being particularly low risk / high reward in conjunction with a reasonably attractive share value.