Diversify with these non-bank financials

Article Excerpt

Most investors typically hold two, three or more of the big five Canadian banks. That makes sense given their steady profit growth and rising dividends. They also give investors exposure to a wide variety of financial services, including mutual funds, retirement planning and insurance. Even so, we continue to advise investors to hold non-bank stocks, like the three we analyze below, as part of their Finance sector investments. However, we see only one of the three as a buy right now. GREAT-WEST LIFECO INC. $31 (Toronto symbol GWO; Conservative Growth and Income Portfolios, Finance sector; shares outstanding: 989.0 million; Market cap: $30.7 billion; Price-to-sales ratio: 0.7; Dividend yield: 5.0%; TSINetwork Rating: Above Average; www.greatwestlifeco.com) is Canada’s second-largest insurance company, after Manulife Financial. It also offers mutual funds and wealth management services. Power Financial Corp. (Toronto symbol PWF) owns 67.7% of the company. In the past few years, Great-West has used acquisitions to expand, particularly in Ireland. Recent purchases in that country include Aviva Health and…

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