# GWO - Great West Life co.



## Banalanal (Mar 28, 2011)

Any thoughts on this insurance company as a long term dividend growth strategy? It managed to not cut its dividend in times when MFC did. It's still heavily discounted to where it was before the 08/09 crash but I don't know if there is justification to believing it should return there. I am attracted to the large payouts of GWO but more importantly the fact that it was raising that dividend consistently before the market crash, that its share price (as well as MFC and SLF) hasn't approached even close to the height of 08/09 levels and that seems to offer a safe chance at large appreciation over the next 5 years...

Thoughts?


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## Echo (Apr 1, 2011)

I bought this one last year for all the reasons you mentioned. It hasn't done anything yet (down a bit, in fact), but the dividend is nice and I expect more upside in the insurance industry next year.


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## Banalanal (Mar 28, 2011)

Right, if I buy it it's certainly a 5 year plus plan. Taking the big dividend with the realistic hopes they increase it and the stock price appreciates over time.


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## Financial Cents (Jul 22, 2010)

I'm tempted to start a position of this when I have (read in, can save) more money to invest. I like this company, although I already own it indirectly through PWF, another company I love.


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## Oldroe (Sep 18, 2009)

I own Power Corp and they own Great West Life plus a bunch more. One is a major European Insurance that's name escapes me now.

I believe both power corp and financial are discounted because of there ownership of this ero dollar insurer.

Power owns Investors Group and London Life. I just believe you get more bang for the buck with power.

Will be buying more power corp/financial if and when it gets nastier in Europe.


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## Sampson (Apr 3, 2009)

Banalanal said:


> Any thoughts on this insurance company as a long term dividend growth strategy?


I have chosen this over Manulife or Sunlife because it is a much purer insurance company. Certainly some exposure to equity markets, but limited. That being said, GWO's growth prospects are obviously much lower.

I don't agree that it is trading at a discount at all and seems fully valued. The haircut from its highs seem warranted considering stable (but also very slowly growing) earnings. Is there something you see to suggest it is undervalued?


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## Banalanal (Mar 28, 2011)

I think you're right in that it is not undervalued, after I've given it more thought. Seems like there may be more value in a company like Sun Life Financial at present.


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## HaroldCrump (Jun 10, 2009)

My opinion about such large cap, diversified, widely held stocks is that usually they are fairly valued, give or take, more or less.

The only time you can get them at a bargain is during times of intense pessimism such as the 2008 - 2009 financial crisis.

That doesn't mean they are not good value or should not be bought at current prices - indeed they have a very important role in most portfolios.
Just don't expect them to be deeply undervalued without any apparent reason.


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## GOB (Feb 15, 2011)

What a bloodbath today - good entry point for the long term perhaps


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## drip99 (Aug 27, 2009)

GOB said:


> What a bloodbath today - good entry point for the long term perhaps


Picked up MFC today at 14.55 but will quickly sell once it reaches 17ish. All Canadian Life Co's dropped big time. I debated all three (MFC, GWO, SLF) but went with MFC for a quick buck. Long term-----I would stick with the Canadian banks for their dividend growth.......RBC looks like a fairly good buy. It is close to its 52 week low.


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## gimme_divies (Feb 12, 2011)

Any ideas on why this stock and SLF have been slaughtered over the last few months? They are the biggest dogs of my portfolio.


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## Assetologist (Apr 19, 2009)

I will buy more at $20ish then $15ish than $10ish if it gets there all the while collecting the dividend.


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## Homerhomer (Oct 18, 2010)

Insurance companies tend to do better when interest rates are higher, with the recent reports and develepements low rates are here to stay, hence the stocks got punished.

I will be buying if it dips a bit more, I am in no rush though.

Great West is reporting tomorrow I believe, perhaps it got a kick in the butt in anticipation of earnings.


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## Financial Cents (Jul 22, 2010)

gimme_divies said:


> Any ideas on why this stock and SLF have been slaughtered over the last few months? They are the biggest dogs of my portfolio.


Why do you want the stock price to go up? Confused.


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## gimme_divies (Feb 12, 2011)

Hah, you caught me there. Really, even though it's part of a long-term buy and hold dividend growth strategy, I want to feel good about my buying decisions. I find it painful to see stocks offering a better yield than when I purchased them a few months ago.

What hurts even more with this stocks is that their dividends have been frozen for a while, so I already wasn't in love with them.

But your question does expose my noobness. I need to relax and be satisfied as long as the divies are coming in (which they are).


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## Sampson (Apr 3, 2009)

Financial Cents said:


> Why do you want the stock price to go up? Confused.


Because it shows the market believes the company will continue to increase revenues, without which, those dividends will dry up, or be cut.


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## CanadianCapitalist (Mar 31, 2009)

Financial Cents said:


> Why do you want the stock price to go up? Confused.


If a stock price goes down, you definitely have to ask yourself: Has the fundamentals changed? Does the market know something that I don't? Let's say you purchased BAC at $40 way back when. You collected dividends for years. It's 2008 and the stock starts to take a dive. An investor would be well advised to take a close look at why. If fundamentals have changed, it might be wise to sell, even at a loss. A stock after all can go to zero.


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## gimme_divies (Feb 12, 2011)

So, all of this being said, would the concensus be that GWO and SLF have suffered mostly because of the low interest rate environment than due to a change of fundamentals? 

I believe these companies are both great insurance companies and aren't going anywhere for several years - hence the investment. Nonetheless, 20% decreases are tough to swallow, no matter what.


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## Financial Cents (Jul 22, 2010)

@CC - fair point and you're correct, fundamentals can change, management can change, the environment can change and change quickly.

There is always risks with holding individual stocks. BAC is a very good example. Those who held a bunch of shares, got crushed. 

That said, lets hope for investors who held BAC, that wasn't their only holding. 

I guess my point is, for the most part, falling stock prices for the dividend investor are your friend. 

@Gimmie Divies - yes, a low interest rate space is not a good friend to lifecos in general. I think both GWO and SLF are very good companies, but like CC has referenced, there is always risk to be had for reward. That said, I own SLF and love the stock even though capital price appreciation has not occurred recently.


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## davext (Apr 11, 2010)

gimme_divies said:


> I believe these companies are both great insurance companies and aren't going anywhere for several years - hence the investment. Nonetheless, 20% decreases are tough to swallow, no matter what.


These are good companies but some of their products make them sensitive to interest rates and the market. That in itself is enough for me to get out of my positions once I get closer to breaking even. I'll collect the dividend in the meantime too.

I have GWO, MFC, and SLF.


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## Synergy (Mar 18, 2013)

Anyone following GWO? No positions within any of the lifecos as of yet but I have GWO, MFC & SLF on my watch list. GWO appeared to have beaten analysts expectation (+ 0.13 EPS) - while the stock price took a decent hit yesterday, and again this morning? Any thoughts? SLF appears to be in favor at the moment (solid Q4 results).


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## leeder (Jan 28, 2012)

I don't follow GWO closely, but my play on this space is through PWF. I did read in the Globe and Mail that GWO missed expectations with its operating earnings.

http://www.theglobeandmail.com/report-on-business/great-wests-fourth-quarter-profits-more-than-double/article16858261


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## Synergy (Mar 18, 2013)

^ I know a lot of people seem to "play" GWO through PWF but I've stayed away so far secondary to my aversion to The Investors Group.

Thanks for the article - that's what I was looking for:



> Excluding the litigation, as well as the costs of the acquisition of Irish Life Group Ltd., operating earnings were $540-million or 54 cents per common share in the fourth quarter, a 10 per cent increase from the $491-million or 52 cents per common share one year earlier. This operating earnings figure missed analyst expectations of 61 cent per share.
> 
> “Great-West announced a fairly sizable miss, which is quite unusual for the insurer,” said John Aiken, analyst at Barclays Capital, in a note to clients.


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## leeder (Jan 28, 2012)

My apologies for going off topic from GWO... Synergy, why are you averse to IGM? Yes, mutual fund business is pretty mature, but earnings released today for IGM shows increased fund sales. Fairly decent dividend, though it's due for a dividend raise.


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## Synergy (Mar 18, 2013)

^ Investors Group - my slight aversion has nothing to do with company fundamentals. I knew a few friends back in the day who worked in the business for a short period of time. The business model, recruiting process, stories, etc. turned me off a little. Fundamentally, there's some potential headwinds (fee transparency) for the MF industry but overall I think they will continue to do well.


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