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Topic: How To Invest

GREAT-WEST LIFECO $32.20 – Toronto symbol GWO

GREAT-WEST LIFECO $32.20 (Toronto symbol GWO; Shares outstanding: 999.5 million; Market cap: $32.7 billion; TSINetwork Rating: Above Average; Yield: 3.8%; www.greatwestlifeco.com) is Canada’s largest insurance company. It also offers mutual funds and wealth management. Power Financial owns 68.1% of Great-West.

Excluding costs to integrate Irish Life, Great-West’s earnings per share rose 7.3% in the three months ended September 30, 2013, to $0.59 from $0.55 a year earlier. The company ended the quarter with $705.1 billion of assets under administration.

Earnings at the Canadian division (which supplies 56% of the total) rose 18.6%, as higher sales of personal insurance offset lower demand for group policies. The value of the assets this business administers also rose, which increased its wealth management fee income.

Great-West’s European division (31% of total earnings)—which includes Irish Life—reported 14.5% higher profits. The U.S. division (13%) is still seeing strong demand for retirement services and individual policies, but its Putnam mutual fund business reported a higher loss, pushing down overall U.S. earnings by 11.6%.

The stock trades at just 12.2 times Great-West’s forecast 2014 earnings of $2.64 a share.

Great-West Lifeco is still a buy.

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