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Portfolio Addition: Power Financial Corp. (PWF)

Earlier in June, I highlighted PWF and JNJ as my short list of stocks for upcoming purchases for my dividend portfolio and I pulled the trigger with Power Financial Corp. A couple of weeks ago I added $5,000 to my TFSA (Tax Free Savings Account) and purchased PWF. I have not purchase JNJ because my focus was on my TFSA and, as Canadians, we have to pay taxes on US dividends in our TFSA but not in RRSP. I decided to keep my dividends working for me as efficiently as possible.

My TFSA has a good mix of holdings at the moment with most of the dividends buying back shares (All except CPG).

I am basically adding another financial to my portfolio with a large exposure to the life insurance industry since it owns nearly 70% of Great West Life (GWO). Historically, PWF has had very good dividend growth above 10% (expect for the past 2 years) along with a healthy dividend yield of 4.70%.

I recommend you read of couple of posts I did recently regarding the 10% rule for dividend growth and the impact it can have on your portfolio:

Readers: Did you manage to take a position during the market bottoms we have had? Or are you still waiting?

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5 Responses to "Portfolio Addition: Power Financial Corp. (PWF)"

  1. Welcome to the PWF party! :) Now we both own it. I like it for all the reasons you have researched and describe above. Here’s to holding this guy, unless fundamentals change, for, like, forever :)

    I’ve got the following in my TFSA:
    HR.UN
    RCI.B
    HSE
    SLF

    Eventually I’ll move PWF and my bank stocks there as well. All in good time.

    Great work, great pick and have a great weekend!
    Mark

  2. Hey Passive!

    It sounds like you have a great, tax efficient strategy in place. I once bought shares in Investors Group (which PowerCorp purchased). I loved the business model: they had no inventory, no salaries to pay, and reaped revenues in fees from unsuspecting Canadians paying high mutual fund expenses. (OK, maybe I shouldn’t brag about that part).

    I still remember that I paid $18 per share for IG. I believe they were double that when PowerCorp took over. But I have to admit that I know a lot less about PowerCorp.

    I bought about $4000 worth of Vanguard’s total U.S. stock market index last week. It was all dividend income that I used to make the purchase. My dividends don’t get reinvested automatically (my Singapore brokerage doesn’t allow that) so every month or so, I have to take my dividends and figure out which of my three indexes to invest in (life sure is simple). My dividend stream is now higher than my first teaching salary, and that fact never ceases to amaze me. My passive income is roughly $45,000 a year.

    I enjoy watching your passive income grow. You’re exactly where I used to be, so it’s great to enjoy the process twice: vicariously, the second time, through your success!

  3. Watch out for CPG, they are covering part of their payout through the DRIP program….you can probably find another energy producer wit ha similar/better yield and healthier POR.

    • The Passive Income Earner says:

      I have been reducing my holdings a couple of time now by taking some profits. Thanks for the heads up.

  4. I took a position in LIQ, but regrettably found out today it’s not eligible for dividend reinvestment. Its cash flow goes to the MM sweep account. Drat!

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