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1. Company Snapshot

1.a. Company Description

Great-West Lifeco Inc., a financial services holding company, engages in the life and health insurance, retirement and investment services, asset management, and reinsurance businesses in Canada, the United States, and Europe.The company offers a portfolio of financial and benefit plan solutions for individuals, families, businesses, and organizations; life, disability, critical illness, accidental death, dismemberment, health and dental protection, and creditor insurance products; and retirement savings and income, annuity, and other specialty products.It also provides employer-sponsored retirement savings plans, individual retirement and taxable brokerage accounts, enrollment services, communication materials, investment options, and education services; and fund management, investment, and advisory services.


In addition, the company offers private-label recordkeeping and administrative services; and investment products, including equity, fixed income, absolute return, and alternative strategies.Further, it provides protection and wealth management products, including payout annuity products; pension products; and life, annuity/longevity, mortgage surety, and property catastrophe reinsurance products.The company offers its products under the Canada Life, Irish Life, Empower, Putnam Investments, and PanAgora brand names.


It distributes its products through a network of advisors, dealers, brokers, managing general agencies, financial institutions, consultants, third-party administrators, sales force, financial planners, employee benefit consultants, banks, and multi-tied agents.The company was founded in 1891 and is based in Winnipeg, Canada.Great-West Lifeco Inc.


operates as a subsidiary of Power Financial Corporation.

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1.b. Last Insights on GWO

Great-West Lifeco's recent performance was driven by strong quarterly gains, double-digit base earnings growth, and increased share buybacks. The company's Q3 2025 results showed significant growth, and its share buyback program, which allows for the repurchase of up to 40 million shares, is expected to have a positive impact on shareholders. Additionally, the inclusion of its preferred shares in the S&P/TSX Preferred Share Index may boost trading activity. RBC Capital Markets raised its price target on Power Corp. of Canada, a related entity, to $68 from $60.

1.c. Company Highlights

2. Great-West Lifeco Delivers Strong Q3 Results with Record Base Earnings

Great-West Lifeco reported a robust third quarter with base earnings reaching a new record high, driven by strong performance across all four segments. The company's base earnings grew 15% year-over-year, with all lines of business growing double digits. Earnings per share (EPS) came in at $1.35, beating analyst estimates of $1.23. Revenue growth was also robust, with analysts estimating next year's revenue growth at 17.5%. The company's financial strength and flexibility enabled it to navigate changing market conditions with confidence while continuing to invest in future growth.

Publication Date: Nov -07

📋 Highlights
  • Record Base Earnings Growth: Base earnings reached a new record high with 15% YoY growth, driven by all lines of business growing double digits and ROE rising to 17.7% (+40 bps).
  • U.S. Retirement Business Success: Net plan inflows surged to $30 billion, highlighting strong customer retention and market share gains in the Retirement segment.
  • Capital & Risk Solutions Expansion: Base earnings grew 20% YoY, fueled by a 36% increase in run-rate insurance results and $80 million added in annualized earnings from new deals.
  • Empower Wealth Milestone: Client assets crossed $100 billion, reflecting the business's market consolidation and technology-driven efficiency improvements.
  • Share Buybacks & Financial Strength: Completed $1 billion in share repurchases and announced an additional $500 million, supported by $2.5 billion cash at the holding company and robust capital fungibility.

Segmental Performance

The company's Retirement business in the U.S. had a fantastic quarter with net plan inflows of $30 billion. Empower's Wealth business achieved a significant milestone, crossing $100 billion in client assets. The Capital and Risk Solutions business had a very strong quarter with base earnings up 20% year-over-year, driven by several deals closed in the quarter. Jeff Poulin noted that the pipeline in the Capital Solutions business remains strong, and the company continues to expect new deals in the coming quarters.

Valuation and Dividend Yield

With a Price-to-Book Ratio of 1.91, the stock appears to be reasonably valued. The Dividend Yield of 3.92% is also attractive, indicating a stable return for investors. The company's financial position has continued to strengthen, with a Net Debt to EBITDA ratio of -0.18, indicating a healthy balance sheet. The ROE of 13.17% is also respectable, suggesting efficient use of shareholder capital.

Growth Prospects and Strategy

The company is investing in foundational capabilities in each business, with a focus on workflow systems and AI to drive efficiency and lower unit costs. David Harney emphasized that the company's ambitions for the Empower business can be achieved through organic growth, and he expressed confidence in the business's ability to continue growing. The company's Capital and Risk Solutions business is expected to continue growing, driven by changing regulatory requirements and demand for capital solutions.

3. NewsRoom

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Great-West Lifeco announces dividend rates on Non-Cumulative 5-Year Rate Reset First Preferred Shares, Series N and Non-Cumulative Floating Rate First Preferred Shares, Series O

Dec -02

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TSX Dividend Stocks Including Olympia Financial Group And Two More

Nov -20

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Canadian Life Companies Split Corp. Declares Class A & Preferred Share Dividend

Nov -19

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Financial 15 Split Corp. Monthly Dividend Declaration for Class A & Preferred Share

Nov -19

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North American Financial 15 Split Corp. Monthly Dividend Declaration for Class A & Preferred Share

Nov -19

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Power Corp of Canada Price Target Raised to $68 at RBC

Nov -19

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Great-West Lifeco (TSX:GWO): Reviewing Valuation After Recent Strong Share Price Gains

Nov -14

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Power Corp. of Canada Downgraded to Hold at TD

Nov -14

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.60%)

6. Segments

Canada

Expected Growth: 4.4%

The Canadian market is stable, but growth is moderated by intense competition. The segment's diversified product offerings and strong distribution network will help maintain a growth rate slightly below the global average.

Europe

Expected Growth: 5.0%

Europe's segment is poised for higher growth due to the increasing demand for retirement and investment products, driven by an aging population and evolving regulatory environments.

United States

Expected Growth: 4.8%

The US segment is expected to grow at a rate higher than the global average, driven by the demand for annuities and employee benefits, as well as the potential for strategic acquisitions.

Capital and Risk Solutions

Expected Growth: 5.2%

The Capital and Risk Solutions segment is expected to outperform the global average, driven by the increasing demand for reinsurance and capital management solutions from global clients seeking to manage risk.

Lifeco Corporate

Expected Growth: 4.0%

Lifeco Corporate's growth is expected to be slightly below the global average, as it is focused on supporting the company's overall operations and may not directly benefit from the same growth drivers as the other segments.

7. Detailed Products

Life Insurance

Great-West Lifeco offers a range of life insurance products, including term life, whole life, and universal life insurance, to provide financial protection to individuals and families.

Health Insurance

The company offers health insurance products, including individual and group health insurance, to provide coverage for medical expenses and other health-related costs.

Retirement Savings

Great-West Lifeco offers a range of retirement savings products, including RRSPs, TFSAs, and pensions, to help individuals save for their retirement goals.

Investments

The company provides a range of investment products, including mutual funds, exchange-traded funds (ETFs), and segregated funds, to help individuals grow their wealth.

Group Benefits

Great-West Lifeco offers group benefits products, including group life insurance, health insurance, and disability insurance, to provide employee benefits to businesses.

Wealth Management

The company provides wealth management services, including investment advice and portfolio management, to help high net worth individuals manage their wealth.

8. Great-West Lifeco Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Great-West Lifeco Inc. is medium due to the presence of alternative financial services providers, but the company's strong brand and diversified product offerings mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers is low for Great-West Lifeco Inc. due to the company's strong brand and diversified product offerings, which reduce the ability of customers to negotiate prices.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium for Great-West Lifeco Inc. due to the company's dependence on a few large suppliers, but the company's strong financial position and diversified supply chain mitigate this threat.

Threat Of New Entrants

The threat of new entrants is low for Great-West Lifeco Inc. due to the high barriers to entry in the financial services industry, including regulatory hurdles and the need for significant capital investment.

Intensity Of Rivalry

The intensity of rivalry is high for Great-West Lifeco Inc. due to the highly competitive nature of the financial services industry, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 26.45%
Debt Cost 4.32%
Equity Weight 73.55%
Equity Cost 8.27%
WACC 7.23%
Leverage 35.96%

11. Quality Control: Great-West Lifeco Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
E-L Financial

A-Score: 7.8/10

Value: 6.7

Growth: 6.8

Quality: 8.1

Yield: 10.0

Momentum: 8.0

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
Great-West Lifeco

A-Score: 7.1/10

Value: 5.7

Growth: 2.7

Quality: 6.9

Yield: 9.0

Momentum: 8.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Manulife

A-Score: 7.0/10

Value: 6.9

Growth: 3.9

Quality: 6.7

Yield: 9.0

Momentum: 6.0

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
MetLife

A-Score: 6.1/10

Value: 7.3

Growth: 4.7

Quality: 5.7

Yield: 6.0

Momentum: 4.0

Volatility: 8.7

1-Year Total Return ->

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Prudential Financial

A-Score: 5.5/10

Value: 5.7

Growth: 3.4

Quality: 4.9

Yield: 8.0

Momentum: 2.0

Volatility: 9.0

1-Year Total Return ->

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Aflac

A-Score: 5.3/10

Value: 3.0

Growth: 4.2

Quality: 6.7

Yield: 4.0

Momentum: 4.0

Volatility: 10.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

63.13$

Current Price

63.13$

Potential

-0.00%

Expected Cash-Flows