Sale will focus operations

Article Excerpt

GREAT-WEST LIFECO $28.38 (Toronto symbol GWO; shares outstanding: 988.4 million; Market cap: $27.7 billion; TSINetwork Rating: Above Average; Dividend yield: 5.5%; www.greatwestlifeco.com) is Canada’s second-largest insurance company, after Manulife Financial. It also offers mutual funds and wealth management services. Power Financial (Toronto symbol PWF) owns 67.7% of the company. The insurer will now sell its U.S. individual life insurance and annuity business to Protective Life Corp. for $1.6 billion. In the first nine months of 2018, this business contributed just $120 million to total earnings of $2.3 billion, or $2.33 a share. Selling the unit will free up $530 million in capital. It also lets the company focus on its more-promising retirement and wealth management businesses in the U.S. Meanwhile, in the past few years, Great-West has used acquisitions to expand, particularly in Ireland. If you exclude costs to integrate those operations, earnings rose 28.0% in the quarter ended September 30, 2018, to $745 million, or $0.75 a share. A year earlier, earnings…