great-west lifeco

We’ve said for some time that insurers are riskier than they look. Insurance has a stable image, but it has always been highly competitive and volatile. For safety-conscious investors, right now we recommend just three Canadian insurance companies as buys: Manulife Financial, Great-West Lifeco and Sun Life Financial. GREAT-WEST LIFECO $29 (Toronto symbol GWO; SI Rating: Above-average) is a leading Canadian insurance company, with $177.3 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 Corp. of Canada controls about 75% of the company’s common stock. Great-West’s earnings in the three months ended December 31, 2005 rose 10.3%, to $469 million or $0.53 a share from $423 million or $0.48. Revenues rose 13.6%, to $6.52 billion from $5.74 billion....

GREAT-WEST LIFECO INC. $29 (Toronto symbol GWO; SI Rating: Above average) is Canada’s largest insurance company, with assets under administration of $174.1 billion. Power Financial Corp. owns 75% of the company’s stock. In the three months ended September 30, 2005, Great-West earned $421 million, up 1.7% from $414 million a year earlier. However, per-share income remained unchanged at $0.47 a share. If you exclude a restructuring charge and extra provisions for claims related to hurricanes in the United States, the company would have earned $0.51 a share in the most recent quarter. Revenue rose 5.1%, to $5.2 billion from $4.95 billion. Most of Great-West’s recent earnings growth comes from its Canadian operations (45% of revenue), mainly due to expense reductions following the acquisition of rival insurer Canada Life Financial in 2003. So far, Great-West has cut its annual costs by $407 million. That’s 23% ahead of its original target. It should finish absorbing these operations in early 2006, and ultimately save $420 million....

Many investors limit their holdings in the Finance sector of their portfolio to Canada’s big five banks. While we have a high opinion of the banks, and recommend that every investor own at least one of them, we also advise investors to look beyond them. Here are three non-bank financial services stocks that we see as buys for long-term gains. However, only two are suitable for conservative investors. GREAT-WEST LIFECO INC. $29 (Toronto symbol GWO; SI Rating: Above average) is Canada’s largest insurance company, with assets under administration of $174.1 billion. Power Financial Corp. owns 75% of the company’s stock....