Great-West Lifeco Inc.

Sound bite for Twitter and StockTwits is: Dividend growth financial. It, as well as other insurance companies will do better when interest rates go up. The dividend yield test says that the company is relatively cheap. This company is part of the Power Corp family so you would not buy Power Corp and/or Power Financial and this one. Life Insurance companies are great long term investments. 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 dividend yield is currently good with low dividend growth. The current dividend is 4.17% with dividend growth over the past 5 and 10 years at 2.4% and 4.1% per year. This company used to be different. Until 2008 it had low to moderate dividend yields (1 to 2%) and a good growth rate (above 15% per year).

Insurance companies had a hard time with very low interest rates. They are currently adjusting and starting again to make money. This company had flat dividends from 2009 to 2014 inclusive. They just began dividend increases again and they are in the low range. The last dividend increase was in 2017 and it was for 6.1%. The last 2 years of increases were in the 6% range. It is a very good sign when dividends are being raised again.

The Return on Equity has been above 10% each of the past 10 years. The ROE for 2016 is 11.9% and the 5 year median is 14.5%. The Debt Ratio at 1.07 may seem low, but this is a normal one for this sort of financial company.

The 5 year low, median and high median Price/Earnings per Share Ratios were for 11.31, 12.43 and 13.55. The 10 year corresponding ratios were 11.34, 12.48 and 14.21. The historical ones are 12.03, 13.19, and 15.00. The current P/E Ratio is 13.25 based on a stock price of $35.24 and 2017 EPS estimate of $2.66. This stock price testing suggest that the stock price is relatively reasonable, but above the median.

I get a Graham Price of $34.39. The 10 year low, median and high median Price/Graham Price Ratios are 0.89, 1.00 and 1.16. The current P/GP Ratio is 1.02 based on a stock price of $35.24. This is 2.5% above the Graham Price. This stock price testing suggest that the stock price is relatively reasonable, but above the median.

The 10 year Price/Book Value per Share Ratio is 1.87. The current P/B Ratio is 1.75 based on Book Value of 419,949M, BVPS of $20.15 and a stock price of $35.24. The current ratio is some 6.3% lower than the 10 year median ratio. This stock price testing suggest that the stock price is relatively reasonable and below the median.

The historical median dividend yield is 3.17%. The current dividend yield of 4.17% is some 31.4% higher. The current dividend yield is based on dividends of $1.37 and a stock price of $35.24. This stock price testing suggests that the stock price is relatively cheap.

The 10 year median Price/Sales (Revenue) Ratio is 0.78. The current P/S Ratio is 0.78 based on 2017 Revenue estimate of $44,511M, Revenue per share of $44.97 and a stock price of $35.24. This stock price testing suggests that the stock price is reasonable and at the median.

When I look at analysts' recommendations I find Hold recommendations (9) and Underperform recommendations (1). The consensus would be a Hold. The 12 month consensus stock price if $36.90. This implies a total return of 8.88% with 4.71% from capital gains and 4.17% from dividends.

Michael Stone on the Baldwin Journal does some tech analysis of this stock. Ryan Goldsman of Motley Fool currently likes insurance companies including this one. Vivian Park on Financial News Daily talks about recent rating changes on this company. (Note a sector perform is a Hold or #3 rating.) See what analysts are saying about this stock on Stock Chase. Some note that insurance companies will do better in a rising interest rate environment.

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. .

The last stock I wrote about was about was Trican Well Service Ltd (TSX-TCS, OTC-TOLWF)... learn more. The next stock I will write about will be Gluskin Sheff + Associates Inc. (TSX-GS, OTC-GLUSF)... learn more on Friday, September 29, 2017 around 5 pm. Tomorrow on my other blog I will write about Money Show 2017 - Stephen Moore... learn more on Thursday, September 28, 2017 around 5 pm.

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