Power Financial's PFD 1ST F: A Steady Beacon in a Sea of Volatility

In an era marked by crypto volatility, interest rate uncertainty, and market whiplash, investors crave income-producing assets that deliver predictability. Power Financial’s PFD 1ST F preferred shares—yielding 5.9% with a 23-year dividend clock—stand out as a rare gem. This analysis reveals why they should be at the core of income-focused portfolios today.

Dividend Consistency: 23 Years Without a Miss

Since their issuance in July 2002, PFD 1ST F shares have paid CAD 0.368 per quarter every single quarter—no exceptions. That’s 92 consecutive years of uninterrupted income, with the most recent dividend declared in August 2025 for payment on October 31. The consistency is unmatched: even during the 2008 financial crisis, the 2020 pandemic, and the crypto winter of 2022–2023, these shares kept their promise.

The data shows no missed or reduced payments. This reliability is underpinned by Power Financial’s position as a subsidiary of Power Corporation, a financial powerhouse with a century-old track record. The shares’ non-cumulative structure doesn’t dilute this stability; the parent’s financial strength ensures dividends remain a priority.

Tax Efficiency: A Canadian Investor’s Advantage

PFD 1ST F dividends are designated as “eligible” under Canada’s tax system, unlocking a preferential tax credit. Unlike “non-eligible” dividends, which face higher tax rates, investors in the top Canadian tax bracket (33%) pay just 39% of the gross dividend in taxes, compared to 54% for non-eligible dividends. For a retiree in Ontario, this means an effective yield of 3.9% after taxes vs. 3.2% for a non-eligible alternative—a material difference over decades.

Resilience in Volatile Markets

While crypto prices swing wildly and equities gyrate, PFD 1ST F’s stability shines. Consider:
- Interest Rate Pressures: Despite the Fed’s 2022–2023 rate hikes, the shares’ yield remains anchored at 5.9%, far above 10-year government bonds (2.8%).
- Crypto Volatility: Bitcoin’s 60% drop in 2022? PFD 1ST F’s price dipped just 5% during the same period, then rebounded.
- Market Crashes: During the 2008 crisis, the shares held their value better than most equities, and their yield provided a cushion against portfolio declines.

Why It Outperforms Riskier Assets

• Vs. Bonds: Corporate bonds offer lower yields (3–4%) and lack tax benefits.
• Vs. Stocks: Equities promise growth but deliver inconsistent dividends. For example, Bank of Montreal’s common shares yield 3.5%, with payout ratios near 60%—vulnerable to profit swings.
• Vs. Cryptocurrency: A 5.9% yield is a safe harbor compared to crypto’s 90%+ volatility over the past five years.

Act Now: The 2025 Opportunity

As of May 2025, PFD 1ST F shares trade at $24.93, a 0.28% discount to their $25 liquidation preference. This slight dip creates a buying opportunity: the dividend yield rises to 6.0% at this price, while the shares’ historical tendency to return to par supports capital appreciation potential.

Final Call: Build Income Resilience

In a world of noise and risk, PFD 1ST F offers clarity: a 5.9% yield, tax efficiency, and 23 years of unbroken dividends. For investors seeking safety, income, and sleep-at-night confidence, this is a no-brainer. With the next dividend payment confirmed for October 2025, there’s no time to waste.

Act now—secure your slice of this reliable income machine before the market catches on.

The author holds no position in Power Financial’s shares and writes purely for educational purposes.