Canadian Insurer Signals Low
Great-West Lifeco Inc. (Lifeco) is a financial services holding company in the life insurance, health insurance, asset management, investment and retirement savings and reinsurance businesses. They own The Great-West Life Assurance Company, London Life Insurance Company, Canada Life Assurance and Putnam Investments.
[PostStockWidget stock_valuation="" pricetype="live" manual_date="Dec. 21, 2012, 2:04pm GMT" symbolcodes="'GWO.TO'" symbolprices="50" div_align="right"]
We view Great West as a top quality Canadian insurer due to their steady and predictable earnings. Like all insurers, they were affected by the 2008 credit crisis but have since cleaned up and are back on track and earnings are expected to reach a record $2.80+ per share within 18 months.
GWO also pays an attractive 4% dividend. Purple Chips 12 – 18 month target: $36.00
LOW VALUATION IN GREAT WEST LIFE AT $30.50 (GWO-T, $CAD 30.45) FULL POSITION
PURPLE CHIPS TARGET: $36.00 POSITION SIZE: FULL (5.0) P/E: 12.6X DIV: $1.23 (4.03%) MKT CAP: $30.4B Debt: $10B RETURN ON CAPITAL: 19.9% EARNINGS YIELD: 7.7% 5 YR EPS Growth rate*:2.3% P/E/G Ratio: 6.4 EPS: $2.42 2015 EST.: $2.84 2016 EST.: $2.83
*Blended growth rate= 2/3 historical (5yrs), 1/3 forward.
