Buy this Canadian dividend growth stock with a 5% yield: Scotiabank [Video]

One of Canada’s large financial holding companies appears to be an attractive dividend investment opportunity, according to Scotiabank analysts.

Power Corporation of Canada, which oversees a portfolio of insurance and wealth management businesses, currently offers investors about 5% dividend yield with the potential for significant growth, according to the investment bank.

“We think Power Corp (POW) offers an attractive combination of value, resilience and healthy dividend yield and that over time, it will be recognized as a quality earnings compounder,” said Scotiabank’s analysts led by Phil Hardie in a note to clients on Dec. 2 which highlighted the company’s potential in dividend investment strategies.

The financial giant, which holds controlling stakes in Great-West Lifeco and IGM Financial, is trading at about a 26% discount to its estimated net asset value, despite making significant strategic progress, according to the bank. Scotiabank believes this discount should eventually narrow to between 10% and 15% as the company scales up its alternative investment platforms.

A key …