Great-West Builds its Foreign Operations

Article Excerpt

GREAT-WEST LIFECO INC. $33 (Toronto symbol GWO; Conservative Growth Portfolio, Finance sector; SI Rating: Above average) has agreed to pay an undisclosed sum for Indiana Health Network, Inc., which provides healthcare services to group and individual policyholders. The purchase enhances Great-West’s growing health insurance operations in the United States, and will immediately add to its profits. In the meantime, Great-West earned $0.54 a share in the third quarter of 2006, up 14.9% from $0.47 a year earlier, mostly due to strong gains at its European operations. If you exclude the impact of the higher Canadian dollar, which hurts earnings from Great- West’s non-Canadian businesses (roughly 50% of earnings), income in the most recent quarter would have grown 24%. Revenue rose 16.9%, to $9.0 billion from $7.7 billion. Ottawa’s plan to tax income trusts has spurred fresh investor interest in high-quality dividend-paying stocks like Great-West. The current $0.96 annual rate yields 2.9%. Great-West is a buy. buy…

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