Morningstar | Sagard Disappoints and Great-West Stays Strong for Power in 3Q
For the third quarter, Power Corporation reported net earnings of CAD 186 million compared with CAD 470 million last year, with the fall-off due to some one-time charges and losses at Sagard. We will maintain our CAD 34 fair value estimate and no-moat rating.Great-West’s third-quarter results showed the company continuing to build on already strong returns. Annualized adjusted return on equity of 14.7% for the quarter marked a modest improvement year over year and sequentially. Overall, the business is performing well, with the one exception being Putnam in the U.S. Canadian operations remain Great-West’s strength, generating an adjusted annualized ROE of 21.0%. We believe improving returns have been driven by the company’s cost-control actions. However, the company has achieved CAD 180 million of the planned CAD 200 million in cost reductions, suggesting the benefits from this program have largely been realized and returns could flatten going forward. Putnam did showcase some momentum in the quarter with $1.7 billion in mutual fund net inflows, its highest level since 2014. However, the business remains unprofitable, and we continue to believe Putnam does not have a path to success in its current form, given industry trends.
There was little in narrow-moat IGM Financial's third-quarter results that would alter our long-term view of the firm. IGM Financial closed the September quarter with CAD 159.7 billion in managed assets, up 0.4% sequentially and 6.5% year over year. Investors Group, which accounted for 56% of the firm's assets under management at the end of the third quarter, saw a 0.3% sequential and 4.4% year-over-year increase in managed assets, despite posting its second consecutive quarter of outflows. Mackenzie Investments, which accounted for 41% of AUM, recorded a 0.6% sequential and 9.4% year-over-year increase in managed assets, with the firm continuing to generate positive flows from its exchange-traded fund operations.
Power is a holding company with interests in companies that are active in the financial services, communications and other business sectors. Co. operates in four segments: Great-West Lifeco Inc., which offers a range of life insurance, retirement and investment products, as well as reinsurance and specialty general insurance products; IGM Financial Inc., which offers financial planning services and investment products to its client base; Parjointco N.V., which holds interests in companies based in Europe active in various sectors, including specialty minerals, water, waste services, energy, and wines and spirits; and Other, which is made up of corporate activities of Co.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.