IGM is the better choice for income seekers

Article Excerpt

As leaders in their markets, these two Power Corp.-controlled firms are great choices for dividend income. However, we prefer IGM for new buying as lower interest rates due to COVID-19 will continue to hurt the performance of Great-West’s investment portfolio. On the other hand, low rates should increase demand for IGM’s mutual funds. GREAT-WEST LIFECO INC. $22 is still a hold. The company (Toronto symbol GWO; Conservative Growth Payer Portfolio, Finance sector; shares outstanding: 928.0 million; Market cap: $20.4 billion; Dividend yield: 8.0%; Dividend Sustainability Rating: Above Average; www.greatwestlifeco.com) is Canada’s second-largest life insurer, after Manulife Financial. It also offers mutual funds and wealth management. Power Corp. (Toronto symbol POW) owns 66.9% of the firm. Starting with the March 2020 payment, the insurer raised the quarterly dividend 6.1%, to $0.438 a share from $0.413 a share. The new annual rate of $1.75 yields a high 8.0%. The company recently merged its Great-West Life, Canada Life and London Life operations under the Canada Life banner. The move will…

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