Wednesday, August 15, 2012

Great-West Life (TSE:GWO) Poised for Continued Growth and Dividends. Upgraded to Buy by Catalyst Research.

Canadian based insurer Great-West Life (TSE:GWO) has been upgraded to a buy by Catalyst Research. In their recent report, they noted that Great-West Life is "operating above expectations" and that the insurer "continues to be a steady earnings performer." 

1 Year Performance for Great-West Lifeco
Chart from Big Charts

Earnings per share for the last quarter rose 8%, and operating return on equity is close to 16%, the highest among Canada's life insurance companies. Earnings for 2012 are expected to be in the range of $2.05 per share, and with shares currently selling for about $22, that represents a significant value for shareholders. 

At only 10 times 2012 earnings, Great-West Life provides an excellent earnings stream to its owners at a better valuation than the overall market and many other financial companies. 

The dividend payout ratio (or percentage of the company's earnings that are returned to shareholders in the form of a dividend payment) is expected to be 55%, which is fairly low and sustainable over the longer-term. What is Great-West Life's Dividend Yield? 5.5%! In today's current low-yield environment, a dividend of this stature is hard to pass up, especially when it is backed by healthy earnings power.

For the Intelligent Investor, Great-West represents a strong value and a disciplined choice. 

Cheers and Happy Investing. 

Full Disclosure: Matthew Clarke owns or indirectly controls shares in Great West Life (TSE:GWO). 

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