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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 Record Earnings with Strong Growth Momentum

Great-West Lifeco reported record base earnings for 2025, with an 11% year-over-year increase to $1.34 actual EPS, beating analyst estimates of $1.28. The company's base ROE reached 18.2%, with its U.S. business crossing 20% for the first time. Total client assets reached $3.3 trillion, with over $1 trillion representing higher-margin assets under management or advisement. The strong financial performance was driven by the company's diversified business model, with Empower's base earnings growing 17% year-over-year.

Publication Date: Feb -14

📋 Highlights
  • Record Base Earnings Growth: 11% YoY increase in base earnings and 12% in base earnings per share, with U.S. business ROE surpassing 20% for the first time.
  • Client Assets & Deployable Cash: Total client assets reached $3.3 trillion, $1 trillion from higher-margin AUM/A, and $2 billion in deployable cash despite $1.6 billion in share buybacks.
  • Dividend Raise & Capital Return: 10% quarterly dividend boost to $0.60/share and $250 million in share buybacks YTD, with $1.6 billion in 2025 buybacks, signaling strong balance sheet.
  • Empower & Regional Growth: Empower’s base earnings surged 17% YoY, Canadian operations up 10%, and Europe grew 7% in constant currency, driven by Retirement & Wealth organic momentum.
  • Capital Solutions & AI Strategy: Capital and Risk Solutions delivered 9% YoY earnings growth with 40% ROE, leveraging AI for efficiency gains while maintaining a high M&A bar for strategic value addition.

Segment Performance

The company's Canadian operations delivered a 10% increase in base earnings, while Europe reported 7% growth in constant currency. Capital and Risk Solutions had a strong quarter with base earnings up 9% year-over-year, driven by the company's Capital Solutions business, which is expected to make up for the lost earnings from the P&C retrocession market. The U.S. Retirement business saw 12% growth in average client assets, although net fee and spread income grew only 4% due to a shift in revenue mix.

Valuation and Dividend

With a Price-to-Book Ratio of 2.0 and a Dividend Yield of 3.95%, Great-West Lifeco's valuation appears reasonable compared to its peers. The company's strong financial position is reflected in its ability to return capital to shareholders, with a 10% increase in quarterly dividend to $0.60 per common share announced during the earnings call. Analysts estimate next year's revenue growth at 9.2%, indicating a positive outlook for the company's future performance.

Growth Prospects and M&A

Great-West Lifeco is confident in achieving its medium-term growth objectives, with a strong foundation for long-term shareholder value creation. The company has a high bar for potential acquisitions, which must add scale or capability to existing market positions and deliver on internal return requirements. With $2 billion of excess cash at the holding company and significant capital generation expected in the medium term, the company is well-positioned to pursue strategic opportunities or return capital to shareholders.

AI and Digital Transformation

The company sees both risks and opportunities in AI, believing it will have a significant impact on efficiency and customer touchpoints. Great-West Lifeco has already implemented AI-assisted advice in their call centers and sees potential for further efficiency gains, with David Harney noting that AI-driven advice will ultimately point to open architecture platforms like theirs.

3. NewsRoom

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

Mar -18

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CANADIAN LIFE COMPANIES SPLIT CORP. Declares Class A & Preferred Share Dividend

Mar -18

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Buy These 3 Top-Ranked Putnam Mutual Funds for Steady Gains

Mar -05

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Assessing Great-West Lifeco (TSX:GWO) Valuation After Mixed Recent Returns And Strong Long Term Performance

Feb -23

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

Feb -19

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FINANCIAL 15 SPLIT CORP. Monthly Dividend Declaration for Class A & Preferred Share

Feb -19

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

Feb -19

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Great-West Lifeco President & Chief Executive Officer David Harney to hold Virtual Fireside Chat with TD Cowen

Feb -17

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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: 8.2/10

Value: 7.5

Growth: 6.8

Quality: 8.8

Yield: 10.0

Momentum: 8.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Great-West Lifeco

A-Score: 7.1/10

Value: 5.4

Growth: 2.9

Quality: 6.2

Yield: 9.0

Momentum: 9.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Manulife

A-Score: 7.0/10

Value: 6.7

Growth: 3.9

Quality: 6.7

Yield: 8.0

Momentum: 7.0

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
MetLife

A-Score: 6.0/10

Value: 7.1

Growth: 4.7

Quality: 5.6

Yield: 6.0

Momentum: 4.0

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Prudential Financial

A-Score: 6.0/10

Value: 7.0

Growth: 3.4

Quality: 5.3

Yield: 8.0

Momentum: 3.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Aflac

A-Score: 5.7/10

Value: 3.7

Growth: 4.2

Quality: 6.6

Yield: 4.0

Momentum: 6.0

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

62.95$

Current Price

62.95$

Potential

-0.00%

Expected Cash-Flows