High Dollar Cuts Overseas Expansion Costs

Article Excerpt

GREAT-WEST LIFECO INC. $30 (Toronto symbol GWO; Conservative Growth Portfolio, Finance sector; SI Rating: Above average) has paid an undisclosed sum for roughly 2,600 small and mid-sized U.S. pension plans. The deal expands the company’s U.S. pension plan asset base by 9%, and should increase its earnings in 2007. The purchase should also make it easier for Great-West to offer these new clients other services, such as employee healthcare plans. The company gets over half of its income from businesses outside of Canada, and the high Canadian dollar has hurt Great-West’s overall profit growth. But the rising dollar also cuts the cost of foreign acquisitions. The stock now trades at 14.0 times the $2.15 a share Great-West will probably earn in 2006. Great-West Lifeco is a buy. buy…

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