Great-West keeps prospering, thanks to strong demand for its workplace pension programs, especially in the U.S. Rising stock market values are also lifting earnings at its wealth management businesses.
Meantime, the stock trades at just 16.6 times the company’s forward earnings forecast. The shares also yield a solid 2.9%.
GREAT-WEST LIFECO (Toronto symbol GWO; www.greatwestlifeco.com) is Canada’s second-largest life insurer after Manulife Financial. Power Corp. of Canada (Toronto symbol POW) owns 68.6% of Great-West.
The stock is up over 68.3% in the past year, thanks to strong demand for its workplace pension programs, especially in the U.S. Rising stock market values are also lifting earnings at its wealth management businesses.
Great-West has increased its focus on wealth management and retirement services in the past few years.
For example, the insurer’s U.S.-based Empower unit has now agreed to acquire the retirement plan and benefits administration business of Milliman Inc. That firm has 1.5 million participants and $130 billion U.S. in assets under administration.
Great-West will pay $340 million U.S. for this business when it completes the purchase by the end of 2026. It expects to save $20 million U.S. within three years by eliminating overlapping operations.
Following the transaction, Empower will have 21 million participants and $2.0 trillion U.S. in client assets. Millman also has annual revenue of about $120 million U.S.
The new assets significantly add to Empower’s scale and size. That should help the business better compete for more contracts. Demand for work-related health care plans in the U.S. is also expected to keep expanding.
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Great-West’s cost savings measures are paying off
In the three months ended March 31, 2026, Great-West’s revenue fell 25.6%, to $8.18 billion from $10.99 billion a year earlier. That’s mainly because the current quarter included a loss on its investment portfolio of $2.07 billion compared to a gain of $1.26 billion a year ago.
However, a cost-savings plan helped boost earnings (before one-time items) by 20.3%, to $1.24 billion from $1.03 billion. The company spent $567 million on share buybacks in the quarter, which is why earnings per share rose at a faster rate of 23.4%, to $1.37 from $1.11.
For all of 2026, earnings will probably rise 11% to $5.58 a share, and the stock trades at 16.6 times that estimate.
Great-West also raised your quarterly dividend by 9.6% with the March 2026 payment. The new annual rate of $2.68 yields a solid 2.9%.
Recommendation in Dividend Advisor: Great-West Lifeco is a buy.
