Power Corp. Earnings: Great-West Life and GBL Drive a Good Quarter for the Holding Company

Power Corporation posted a good set of numbers in the third quarter driven by Great-West Life and GBL. The firm reported adjusted net earnings of CAD 1.007 billion or CAD 1.52 per share in the third quarter, compared with CAD 520 million or CAD 0.78 per share in the third quarter of the previous year. We note that the third-quarter results were positively impacted by a nonrecurring gain of CAD 323 million in GBL due to the deconsolidation of Webhelp following the previously announced combination of Webhelp with Concentrix Corporation. The firm has declared a quarterly dividend of CAD 52.50 cents per share representing a 6.0% dividend yield as per the current stock price. Power Corporation's adjusted net asset value, or NAV, per share stood at CAD 48.26 as of the end of third-quarter 2023, which compares with CAD 48.86 at the beginning of the quarter. The firm has continued to allocate capital to buybacks given the difference in its NAV and share price and has repurchased approximately CAD 452 million of shares in 2023. We are reducing our fair value estimate to CAD 40.00 from CAD 41.50 after incorporating the third-quarter results.