POW vs SLF

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Can you compare the two? I’ve had SLF in my portfolio for a couple of years now, and I’ve been thinking lately about switching my insurance exposure to a stronger play. I primarily had SLF as a Dividend Growth stock, but a cursory look shows that POW might be superior in DG and capital growth (your YouTube video from today featuring POW highlighted this as well). Thoughts?

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Asked on January 26, 2021 12:47 pm
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Hi Daniel,

It is no secret we like POW - it has been on our dividend Bull List for about a year. I would however, not discount SLF - which has been a solid play. In fact, it has been one of the best insurers in the country for a number of years. In fact, it has outperformed POW over the past year, 3YR, 5YR and 10YR periods.

I'd consider SLF one of the best in the industry and would not necessarily swap out one for the other. Where POW stands out is in terms of valuations - it has been chronically undervalued for the past few years. We see this company much like TFII which was undervalued for years before finally getting the due it deserved.

The other difference is that POW is morphing into more of an asset management company. It is making more and more investments outside of insurance and I see this trend continuing given it's recent success. So in a way, while POW generates most of earnings from insurance, it is slowly diversifying away which means, holding both isn't necessarily a bad thing.

In SLF, you have on of the industry's best - and if it was me, I'd keep it and then look to deploy fresh capital into POW. Obviously, you do you, but that is the approach I would take.

Hope this makes sense.

Mat

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Posted by Mathieu Litalien
Answered on January 26, 2021 4:49 pm
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Private answer

Hi Daniel,

It is no secret we like POW - it has been on our dividend Bull List for about a year. I would however, not discount SLF - which has been a solid play. In fact, it has been one of the best insurers in the country for a number of years. In fact, it has outperformed POW over the past year, 3YR, 5YR and 10YR periods.

I'd consider SLF one of the best in the industry and would not necessarily swap out one for the other. Where POW stands out is in terms of valuations - it has been chronically undervalued for the past few years. We see this company much like TFII which was undervalued for years before finally getting the due it deserved.

The other difference is that POW is morphing into more of an asset management company. It is making more and more investments outside of insurance and I see this trend continuing given it's recent success. So in a way, while POW generates most of earnings from insurance, it is slowly diversifying away which means, holding both isn't necessarily a bad thing.

In SLF, you have on of the industry's best - and if it was me, I'd keep it and then look to deploy fresh capital into POW. Obviously, you do you, but that is the approach I would take.

Hope this makes sense.

Mat

Marked as spam
Posted by Mathieu Litalien
Answered on January 26, 2021 4:49 pm