Hi there,
Nothing has changed in our investment thesis on Power Corp as an income investment. Over the short term, I believe the financial sector will continue to be weighed down by economic uncertainty as the pandemic persists. Low rates are also here to stay for some time, and that will make for a challenging operating environment for financials. In terms of raising the dividends, most financials are at the mercy of the OFSI. I doubt they give permission to financial institutions to raise dividends until end of year at the earliest.
That being said, this is no reason to dump a position. Most financials offer attractive years and one or two years of dividend stagnation isn't the end of the word. Most financials rebounded in a big way post Financial Crisis and most did not cut the dividend. Historically, financials are trading at cheaper than average valuations and as such, it may be a good time to accumulate positions. On the flip side, they could stay cheap for some time. There is just plenty of unknowns currently.
I am long POW and have owned it for a long time. It has long been a reliable dividend payer and hasn't cut the dividend. I also like the fact that it has made several strategic investments in disruptive technology. For example, it is the largest shareholder of Wealthsimple and EV maker Lion Electric. Of note, I am also long MFC and bought this one shortly after the Financial Crisis. It does have a higher dividend growth rate in recent years but keep in mind it was also one of the few financials to cut the dividend in the Financial Crisis.
The way I look at both - MFC is cheaper but is likely to be a little more volatile than POW which is the more reliable play and has a higher yield. In recent years, MFC has outperformed because it had higher growth rates, but that may change in the future. POW looks to finally be entering a new period of growth after many years of stagnation.
Mat