Tuesday, October 6, 2015

Great-West Lifeco Inc. 2

Sound bite for Twitter and StockTwits is: Probably rather cheap, below relative median. This stock is not as relatively cheap as it has been. However, it you want to buy a good dividend stock it is best to buy them cheap for long term gain. See my spreadsheet on Great-West Lifeco Inc.

I do not own this stock of Great-West Lifeco Inc. (TSX-GWO, OTC-GWLIF). This stock seems to be a favorite with investors who like solid, stable, dividend paying stock. It was on Mike Higgs' list and it used to be on the dividend lists. I have been following this stock for some time. However, I will not buy it because I have Power Financial Corp. (TSX-PWF). Great West Lifeco Inc. is one of the companies under the Power Financial Corp. and Power Corp. (TSX_POW).

The 5 year low, median and high median Price/Earnings per Share Ratios are 10.54, 12.34 and 13.30. The corresponding 10 year values are a bit higher at 11.96, 13.64 and 15.70. The current P/E Ratio is 11.68 based on a stock price of $31.89 and 2015 EPS Ratios $2.73. This stock price testing suggests that the stock price is reasonable, but above the relative median.

I get a Graham Price of $27.58. The 10 year low, median and high median Price/Graham Price Ratios are 1.00, 1.18 and 1.31. The current P/GP Ratio is 1.16. This stock price testing suggests that the stock price is reasonable and below the median.

I get a 10 year Price/Book Value per Share Ratio of 2.20. The current P/B Ratio is 2.58 based on a stock price of $31.89 and BVPS of $12.38. This suggests that the stock price is reasonable, but above the relative median.

The 5 year median dividend yield is 4.65%. This is some 12.1% above the current dividend yield of 4.09% based on a stock price of $31.89 and dividends of $1.30. This stock price testing suggests that the stock price is reasonable but above the relative median.

However, the historical average, median and closing dividend yields are 4.06%, 3.03% and 2.78%. These dividend yields are 0.8%, 35% and 47% below the current dividend yield and suggest that the stock price is rather cheap and certainly below the relative median.

When I look at analysts' recommendations, I find Buy, Hold and Underperform Recommendations. Most of the recommendations are a Hold and the consensus recommendation would be a Hold. The 12 month stock price consensus is $37.40. This implies a total return of 21.37% with 17.28% from capital gains and 4.09% from dividends. The total return does not match a Hold recommendation as the return is rather high.

According to Dakota Financial News this company has received an average recommendation of a Hold. It seems there has not been much in the way of reviews of this stock lately. However, in 2011 the blogger Dividend Earner review this stock and has an good through review. There are some analysts' comments at Stock Chase.

This is the second of two parts. The first part was posted on Monday, October 05, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

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. Its web site is here Great-West Lifeco Inc.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

No comments:

Post a Comment