Tuesday, September 15, 2009

Great-West Lifeco Inc

I am reviewing this stock (TSX-GWO) today as I have not yet reviewed it and the 2008 year end annual statement has came in. I do not own this stock, but I follow it. It is a favorite with investors who like solid, stable, dividend paying stock. Although the yield on this stock varies, as all others do, but typically this stock pays about a 2.5% yield. It is easy to see why it is a favorite. However, if you are investing in Power Financial or Power Corp, you should be aware that this company is mostly owned by Power Financial, which is mostly owned by Power Corp.

Most growth figures on this company are great for this company. The 10 year return on this company is over 8.5% per year. The 5 year is much worse. It is only 2.5% per year. These figures include the dividend payments. Also, note that the dividend payments have not increased this year yet. They increased half way into 2008, so 2009 actual dividends are higher than 2008, but there has been no increase. At the end of 2008, the stock price was below that of 5 years ago. Currently, the stock price is just above what it was 5 years ago. The other thing to mention is the Asset/Liability ratio. This is 1.11. This is a little above the long term average of 1.09. However, it is inline with other financial corporations.

The Return on Equity (ROE) for this company has been good, generally. The 5 year average at the end of 2008 is 16.6%. However, the ROE for 2008 was much lower than average at 11%. The ROE for the first half of 2009 is also at 11%. 11% is not bad, and we are in a recession in which the financial firms have been hit harder than other types of firms. I am sure that this company will perform just fine in the future as it has in the past. I am not buying any as I have enough of Power Financial.

Great-West Lifeco is a financial services holding company with interests in the life insurance, health insurance, retirement savings, investment management and reinsurance businesses. The Corporation has operations in Canada, the United States, Europe and Asia through The Great-West Life Assurance Company, London Life Insurance Company, The Canada Life Assurance Company, Great-West Life & Annuity Insurance Company and Putnam Investments, LLC. Lifeco and are members of the Power Financial Corporation group of companies. Power Financial Corp owes 65% of this company. Its web site is www.greatwestlifeco.com. See my spreadsheet at www.spbrunner.com/stocks/gwo.htm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets.

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