We prefer IGM for your new buying

Article Excerpt

These two firms, which are controlled by Power Corp. (see box), have a long history of paying investors steady dividends. However, we feel IGM is in a better position to prosper as low interest rates help spur demand for its mutual funds. On the other hand, low rates hurt the returns Great-West gets on its investment portfolio. It uses income from those holdings to pay out insurance claims. GREAT-WEST LIFECO INC. $26 is a hold. The company (Toronto symbol GWO; Conservative Growth Payer Portfolio, Finance sector; shares outstanding: 927.7 million; Market cap: $24.1 billion; Dividend yield: 6.7%; 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 services. Power Corp. (Toronto symbol POW) owns 70.89% 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. The new annual rate of $1.75 yields a very high 6.7%. The company recently announced that its Empower…