great-west lifeco
Toronto symbol GWO, is Canada’s largest insurance company. It also provides retirement planning and wealth management services.
Great-West and IGM have moved down lately due to concerns over slowing economic growth and volatile stock markets. However, both companies are leaders in their fields, and both are cheap in relation to their earnings. They also have long histories of raising their dividends. GREAT-WEST LIFECO INC. $21 (Toronto symbol GWO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 949.8 million; Market cap: $19.9 billion; Price-to-sales ratio: 0.7; Dividend Yield: 5.9%; TSINetwork Rating: Above Average; www.greatwestlifeco.com) is Canada’s largest insurance company, with $523.0 billion of assets under administration. It also sells mutual funds, as well as retirement-planning and wealthmanagement services. Canada accounts for 53% of the company’s earnings, followed by Europe (31%) and the U.S. (16%). In the three months ended March 31, 2012, Great-West’s earnings rose 8.7%, to $451 million, or $0.48 a share. A year earlier, it earned $415 million, or $0.44 a share. Revenue rose 3.9%, to $6.5 billion from $6.3 billion....
Many leading U.S. and Canadian multinational companies stand to gain from rising consumer and business demand in foreign markets. These global companies also cut risk for investors. We generally advise against investing directly in foreign markets, especially emerging markets. These markets are highly volatile, and growth can be swift. But investors enjoy far less legal protection than they do in more developed countries. However, high-quality U.S. and Canadian companies with profitable international interests can be good additions to almost any portfolio. Canadian stocks with substantial foreign operations (especially outside the U.S.) include the following:...
Chubb Corp., $69.05, symbol CB on New York (Shares outstanding: 270.4 million; Market cap: $18.7 billion; www.chubb.com) sells insurance to individuals and businesses through 8,500 independent agents and brokers in the U.S., Canada, Europe, Australia, Asia and parts of Latin America. In 2011, the U.S. supplied 73% of the company’s revenue. New Jersey-based Chubb began selling insurance in 1882. It is the 12th largest insurance company in the U.S. The company has three main divisions: Chubb Commercial Insurance (43% of premiums received in 2011) supplies a wide range of insurance policies to businesses; Chubb Personal Insurance (34%) sells home, automobile and health insurance to individuals; and Chubb Specialty Insurance (23%) sells liability insurance to businesses....
TRANSCANADA CORP. $43.51 (Toronto symbol TRP; Shares outstanding: 704.2 million; Market cap: $30.6 billion; TSINetwork Rating: Above Average; Dividend yield: 4.1%; www.transcanada.com) is expanding its Tamazunchale pipeline, which pumps natural gas from Mexico’s state-owned oil company to gas-fired power plants. This extension will cost $500 million U.S. The company expects to complete the project in 2014. The company has a 25-year supply deal with the state-owned power company, which cuts the risk of this project. Mexico continues to convert oil-fired power plants to gas, and TransCanada’s expertise should help it win more pipeline contracts. TransCanada is a buy....
MANITOBA TELECOM SERVICES INC. $32.72 (Toronto symbol MBT; Shares outstanding: 65.5 million; Market cap: $2.1 billion; TSINetwork Rating: Average; Dividend yield: 5.2%; www.mts.ca) plans to deploy Long Term Evolution (LTE) wireless technology in 2012. LTE networks are up to five times faster than its current high-speed wireless systems. The company did not reveal the cost of these upgrades. However, this technology should help Manitoba Telecom sell more smartphones, including the hugely popular Apple iPhone. That’s good news for the company, because it earns higher fees from these devices than regular cellphones. Manitoba Telecom is a buy....
Both Great-West Lifeco and IGM Financial sell mutual funds and wealth-management services. The companies’ fees vary with the value of the assets they manage, so both stocks have moved down due to recent stock-market volatility. Even so, we still like their long-term prospects. GREAT-WEST LIFECO INC. $22 (Toronto symbol GWO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 949.5 million; Market cap: $20.9 billion; Price-to-sales ratio: 0.7; Dividend yield: 5.6%; TSINetwork Rating: Above Average; www.greatwestlifeco.com) is Canada’s largest insurance company, with $497.0 billion of assets under administration. That’s up 7.2% in the past year. Great-West also sells retirement-planning and wealth-management services. Canada accounts for 49% of its earnings, followed by Europe (27%) and the U.S. (24%). In the three months ended June 30, 2011, Great-West’s earnings rose 15.6%, to $526 million, or $0.55 a share. A year earlier, it earned $455 million, or $0.48 a share. However, revenue fell 3.8%, to $7.1 billion from $7.4 billion, due to fewer gains from its investment portfolio....
GREAT-WEST LIFECO $22 (Toronto symbol GWO; Shares outstanding: 959.8 million; Market cap: $21.0 billion; TSINetwork Rating: Above Average; Dividend yield: 5.6%) is Canada’s largest insurance company, with $497 billion in assets under administration. It also operates in the U.S. and Europe. In addition to insurance, Great-West sells wealth management and other financial services. In the three months ended June 30, 2011, Great-West’s earnings rose 15.6%, to $526 million, or $0.55 a share, from $455 million, or $0.48 a share. The increase came from strong investment returns and insurance sales in Canada. The latest earnings also beat consensus estimates of $0.49 a share. The company’s balance sheet is strong. As well, Great-West trades at just 10.7 times the $2.06 a share that it is likely to earn in 2011. The shares yield a high 5.6%....
PowerShares Canadian Dividend Index ETF, $18.44, symbol PDC on Toronto (Shares outstanding: 250,000; Market cap: $4.6 million; www.investco.ca), aims to replicate the performance of the Indxis Select Canadian Dividend Index. PowerShares Canadian Dividend Index ETF was launched on June 16, 2011. The units began trading at $20. However, the fund duplicates the PowerShares Canadian Dividend Index mutual fund, which started up in November 2009. The fund holds 35 stocks, eight real estate investment trusts (REITs) and two income trusts. It has an expense ratio of 0.50%, and yields 3.6%. Its top 10 holdings are Royal Bank, 10.0%; TD Bank, 10.0%, Bank of Nova Scotia, 9.7%; Bank of Montreal, 7.4%; CIBC, 5.6%; TransCanada Corp., 5.4%; Thomson Reuters, 5.2%; Enbridge, 4.6%; Great-West Lifeco, 4.4%; and Power Financial, 3.9%....
TRANSCANADA CORP. $42.91 (Toronto symbol TRP; Shares outstanding: 691.7 million; Market cap: $30.1 billion; TSINetwork Rating: Above Average; Dividend yield: 3.9%; www.transcanada.com) has shut down part of its Keystone pipeline, which pumps crude oil from Alberta to Oklahoma. That’s because a broken valve inside a pumping station in North Dakota caused 500 barrels of oil to leak out. The company has repaired the station, and expects to soon restart the line. This leak could fuel opposition to TransCanada’s plan to extend Keystone to refineries on the U.S. Gulf Coast. However, its quick response limited the size of the leak. Moreover, it will inspect other pumping stations to lower the odds of another leak. TransCanada is a buy....
MANITOBA TELECOM SERVICES INC. $33 (www.mts.ca) continues to benefit from its cost cuts and strong demand for wireless and high-speed Internet servcies. In the first quarter of 2011, earnings per share jumped 59.5%, to $0.67 from $0.42 a year earlier. Revenue fell 0.6%, to $439.3 million from $442.0 million. Buy. TORSTAR CORP. $13 (www.torstar.com) has raised its quarterly dividend by 35.1%, to $0.125 a share from $0.0925. The new annual rate of $0.50 yields 3.8%. Best Buy. GREAT-WEST LIFECO INC. $27 (www.greatwestlifeco.com) earned $0.44 a share in the three months ended March 31, 2011, down 2.2% from $0.45 a year earlier. However, the company had...