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GREAT-WEST LIFECO INC. $28 (Toronto symbol GWO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 894.4 million; Market cap: $25.0 billion; SI Rating: Above average) holds $101 million of fixed-income securities issued by Lehman Brothers, which declared bankruptcy in September, 2008. The company also holds $347 million of securities linked to troubled U.S.-based AIG (American International Group), plus $2.1 million of fixed-income securities of Washington Mutual Inc.
Great-West will record an undisclosed charge against its third quarter earnings to reflect the decline in value of these investments. However, the company’s total exposure of $450.1 million is minimal next to its total assets of $131.3 billion, or equity of $12.4 billion. Great-West may also take advantage of the current crisis to buy promising operations at bargain prices.
As one of our recommended Canadian dividend stocks, Great-West Lifeco is a buy.
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