great-west lifeco

GREAT-WEST LIFECO $29.71 (Toronto symbol GWO; SI Rating: Above-average) is a leading Canadian insurance company. As well, it provides wealth management and other financial services. Great-West also operates in the U.S. and Europe. Great-West reports sharply higher earnings in the three months ended June 30, 2008, to $1.2 billion or $1.36 a share, from $544 million or $0.61 a share. The latest quarter included a gain of $649 million on the sale of the company’s U.S. health care business. Without the gain, earnings per share rose 3.3%, to $0.63 from $0.61. Without the effects of the rising Canadian dollar, earnings would have risen 8%....

NOVA CHEMICALS CORP. $28 (Toronto symbol NCX; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 83.1 million; Market cap: $2.3 billion; SI Rating: Extra risk) has formed a joint venture with Reliance Industries Ltd. This new company will design and build energy efficient buildings in India, using construction components supplied by Nova. This alliance gives Nova an easy way to profit from India’s booming construction market. Nova Chemicals is a buy. GREAT-WEST LIFECO INC. $32 (Toronto symbol GWO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 894.1 million; Market cap: $28.6 billion; SI Rating: Above average) earned $0.73 a share in the three months ended March 31, 2008, up 25.9% from $0.58 a year earlier. If you exclude two unusual gains, Great-West’s earnings would have grown 3.4% to $0.60 a share in the latest quarter. Unfavourable foreign exchange rates also lowered Great-West’s most recent quarterly profits by $0.05 a share. Revenue jumped to $18.0 billion from $6.9 billion due to last year’s purchase of U.S.-based mutual fund manager Putnam Investments Trust....

GREAT-WEST LIFECO $31.29 (Toronto symbol GWO; SI Rating: Above-average) is a leading Canadian insurance company. As well, it provides wealth management and other financial services. Great-West also operates in the U.S. and Europe. The 2007 purchase of Putnam Investments Trust for $3.9 billion doubled its assets under administration, to $394 billion....

Portfolio diversification is an important strategy for cutting risk. We like all five big Canadian banks. But we still think adding non-bank stocks like these three insurance companies to your finance-sector holdings is a good idea for portfolio diversification: MANULIFE FINANCIAL $39.37 (Toronto symbol MFC; SI Rating: Above-average) sells life and other forms of insurance, as well as mutual funds and investment management services. It operates in 19 countries and territories worldwide. Manulife has assets under administration of $396.3 billion. Its geographic diversification in the U.S. and Asia, including China, offers growth prospects. The shares yield 2.2%. Manulife is a buy....

POWER CORPORATION $34.10 (Toronto symbol POW; SI Rating: Above average) is a diversified holding company. Power Corp. controls one of Canada’s largest mutual-fund companies, IGM Financial, and Great-West Lifeco, one of the largest life insurers. Power Financial, 66.4% held, is a holding company for Power Corp.'s financial assets, including 72.9% of Great-West Lifeco and 58.4% of IGM Financial. As well, Power Financial holds 50% of Parjointco, which in turn owns a 54.3% interest in Swiss-listed Pargesa Holdings SA. Pargesa has 95% of its assets in five large European companies: Imerys (minerals processing), Total SA (world’s fourthlargest oil firm), Pernod Ricard (wine and spirits), Suez (energy, water and waste services) and Lafarge SA (cement and building materials). Power Corp. also owns 100% of Gesca Ltée, which publishes Montreal’s La Presse and six other daily newspapers. In the three months ended December 31, 2007, Power Corp.'s earnings rose 21.1%, to $350 million or $0.70 a share, from $289 million or $0.57 a share. Great-West Lifeco contributed $250 million to Power Corp.'s earnings and IGM Financial contributed $87 million....

Power Corp. has moved down this year along with most financial services related stocks. But both of its major holdings are leaders in their fields, are now cheap in relation to earnings and have long histories of rising dividends. POWER CORPORATION $34.10 (Toronto symbol POW; SI Rating: Above average) is a diversified holding company. Power Corp. controls one of Canada’s largest mutual-fund companies, IGM Financial, and Great-West Lifeco, one of the largest life insurers. Power Financial, 66.4% held, is a holding company for Power Corp.'s financial assets, including 72.9% of Great-West Lifeco and 58.4% of IGM Financial. As well, Power Financial holds 50% of Parjointco, which in turn owns a 54.3% interest in Swiss-listed Pargesa Holdings SA. Pargesa has 95% of its assets in five large European companies: Imerys (minerals processing), Total SA (world’s fourthlargest oil firm), Pernod Ricard (wine and spirits), Suez (energy, water and waste services) and Lafarge SA (cement and building materials). Power Corp. also owns 100% of Gesca Ltée, which publishes Montreal’s La Presse and six other daily newspapers....

The markets rattled many investors this week with steep one-day drops. At times like this, it’s good to remember that even when a further decline lies ahead, high volatility generally signals that it’s “a good time to buy”, rather than “a good time to sell”. It’s also encouraging to see that despite the steep one-day drops, most major market indexes are still at or above the lows they hit in January. BANK OF MONTREAL $43.10, Toronto symbol BMO, fell over 10% this week after it announced writedowns of asset-backed securities and higher loan loss provisions. In its first fiscal quarter ended January 31, 2008, earnings fell 26.7% to $255 million or $0.47 a share from $348 million or $0.67 a share a year earlier. The latest earnings figure included a $324 million after-tax writedown of securities, plus a $38 million rise in loan loss provisions. If you exclude unusual items, earnings fell 8.3%....

GREAT-WEST LIFECO INC. $32 (Toronto symbol GWO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 892.5 million; Market cap: $28.6 billion; SI Rating: Above average) is Canada’s largest insurance company, with over $400 billion in assets under administration. Power Corp. controls 70% of Great-West’s shares. Great-West sells life insurance and health insurance, directly and through brokers, to groups and individuals under the Great-West, London Life and Canada Life banners. Other services include retirement planning and wealth management. It also provides administrative services to pension fund managers. Great-West’s revenues rose from $16.7 billion in 2002 to $27.3 billion in 2006, mainly due to its 2003 purchase of rival Canada Life. Earnings grew from $1.27 a share (total $931 million) in 2002 to $2.10 a share ($1.9 billion) in 2006. Great-West likely earned $2.45 a share in 2007....

Many Canadians tend to stick with the five big banks when it comes to the Finance segment of their portfolios. While we do recommend that most investors hold two or more bank stocks, you should also diversify your holdings with high-quality non-bank stocks such as Great-West Lifeco or IGM Financial. Both companies are leaders in their fields (insurance and mutual funds), are cheap in relation to earnings and have long histories of rising dividends. Their conservative investing styles have also helped shield them from big writedowns of securities backed by subprime mortgages and other risky assets. GREAT-WEST LIFECO INC. $32 (Toronto symbol GWO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 892.5 million; Market cap: $28.6 billion; SI Rating: Above average) is Canada’s largest insurance company, with over $400 billion in assets under administration. Power Corp. controls 70% of Great-West’s shares....

GREAT-WEST LIFECO $34.93 (Toronto symbol GWO; SI Rating: Above-average) is a leading Canadian insurance company, with $404 billion in assets under administration. The company also provides wealth management and other financial services. It also operates in the U.S. and Europe. Power Financial controls about 75% of Great-West. Great-West’s earnings in the three months ended September 30, 2007 excluding one-time items rose 17%, to $558 million or $0.63 a share from $477 million or $0.54. Revenues rose 1.2%, to $6.64 billion from $6.57 billion. The shares yield 3.2%. Great-West closed the $3.9 billion U.S. acquisition of U.S.-based investment management firm and mutual fund company Putnam Investments Trust in August, 2007. The purchase more than doubled Great-West’s assets under administration. Great-West is also making a series of small acquisitions in the U.S. employer-sponsored health insurance market....