LSE:0AH3

Stock Analysis Report

Executive Summary

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.

Rewards

Trading at 55% below its fair value

Earnings are forecast to grow 12.05% per year

Pays a high and reliable dividend of 5.32%

Risk Analysis

No risks detected for 0AH3 from our risk checks.


Snowflake Analysis

Undervalued established dividend payer.


Similar Companies

Share Price & News

How has Great-West Lifeco's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 0AH3 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.9%

0AH3

-5.5%

GB Insurance

-4.4%

GB Market


1 Year Return

n/a

0AH3

-6.7%

GB Insurance

1.4%

GB Market

Return vs Industry: Insufficient data to determine how 0AH3 performed against the UK Insurance industry.

Return vs Market: Insufficient data to determine how 0AH3 performed against the UK Market.


Shareholder returns

0AH3IndustryMarket
7 Day-1.9%-5.5%-4.4%
30 Day0.1%-3.2%-6.3%
90 Day5.1%0.5%-2.7%
1 Yearn/a3.7%-6.7%6.7%1.4%
3 Yearn/a12.5%-7.6%12.6%-1.5%
5 Yearn/a24.3%-7.6%28.8%-0.7%

Price Volatility Vs. Market

How volatile is Great-West Lifeco's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Great-West Lifeco undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 0AH3 (CA$34.59) is trading below our estimate of fair value (CA$76.83)

Significantly Below Fair Value: 0AH3 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 0AH3 is good value based on its PE Ratio (13.2x) compared to the Insurance industry average (14x).

PE vs Market: 0AH3 is good value based on its PE Ratio (13.2x) compared to the UK market (17.7x).


Price to Earnings Growth Ratio

PEG Ratio: 0AH3 is poor value based on its PEG Ratio (1.1x)


Price to Book Ratio

PB vs Industry: 0AH3 is good value based on its PB Ratio (1.5x) compared to the GB Insurance industry average (1.8x).


Next Steps

Future Growth

How is Great-West Lifeco forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

12.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 0AH3's forecast earnings growth (12% per year) is above the savings rate (0.5%).

Earnings vs Market: 0AH3's earnings (12% per year) are forecast to grow slower than the UK market (13% per year).

High Growth Earnings: 0AH3's earnings are forecast to grow, but not significantly.

Revenue vs Market: Insufficient data to determine if 0AH3's revenue is forecast to grow faster than the UK market.

High Growth Revenue: Insufficient data to determine if 0AH3's revenue is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 0AH3's Return on Equity is forecast to be low in 3 years time (14.1%).


Next Steps

Past Performance

How has Great-West Lifeco performed over the past 5 years?

-1.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 0AH3 has high quality earnings.

Growing Profit Margin: 0AH3's current net profit margins (5.3%) are lower than last year (6.7%).


Past Earnings Growth Analysis

Earnings Trend: 0AH3's earnings have declined by -1% per year over the past 5 years.

Accelerating Growth: 0AH3's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 0AH3 had negative earnings growth (-20.3%) over the past year, making it difficult to compare to the Insurance industry average (23.4%).


Return on Equity

High ROE: 0AH3's Return on Equity (9.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Great-West Lifeco's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: 0AH3 has a low level of unsold assets or inventory.

Debt Coverage by Assets: 0AH3's debt is covered by short term assets (assets are 20.3x debt).


Financial Institutions Analysis

Asset Level: 0AH3's level of assets compared to its equity is moderate.

Allowance for Bad Loans: Insufficient data to determine if 0AH3 has a sufficient allowance for bad loans.

Low Risk Liabilities: 0AH3 reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if 0AH3 has an acceptable proportion of non-loan assets held.

Low Risk Deposits: 0AH3 has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if 0AH3 has an appropriate level of bad loans.


Next Steps

Dividend

What is Great-West Lifeco's current dividend yield, its reliability and sustainability?

5.32%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Great-West Lifeco before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company5.3%marketbottom25%1.9%markettop25%5.3%industryaverage5.1%forecastin3Years5.5%

Current dividend yield vs market & industry

Notable Dividend: 0AH3's dividend (5.32%) is higher than the bottom 25% of dividend payers in the UK market (1.9%).

High Dividend: 0AH3's dividend (5.32%) is low compared to the top 25% of dividend payers in the UK market (5.34%).


Stability and Growth of Payments

Stable Dividend: 0AH3's dividends per share have been stable in the past 10 years.

Growing Dividend: 0AH3's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (66.2%), 0AH3's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 0AH3's dividends in 3 years are forecast to be covered by earnings (55.2% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.5yrs

Average management tenure


CEO

Paul Mahon (55yo)

6.8yrs

Tenure

CA$7,116,415

Compensation

Mr. Paul Anthony Mahon has been the Chief Executive Officer and President of London Life Insurance Company, Canada Life Financial Corporation, Great-West Lifeco Inc. and Canada Life Limited since May 3, 20 ...


CEO Compensation Analysis

Compensation vs Market: Paul's total compensation ($USD5.36M) is about average for companies of similar size in the UK market ($USD4.70M).

Compensation vs Earnings: Paul's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Paul Mahon
President6.8yrsCA$7.12m0.016% CA$5.1m
Garry MacNicholas
Executive VP & CFO4.9yrsCA$2.40m0.00055% CA$171.1k
Raman Srivastava
Executive VP & Global Chief Investment Officer2.5yrsCA$3.46m0.00017% CA$52.9k
Sharon Geraghty
Executive VP & General Counsel2.1yrsCA$3.51mno data
Graham Bird
Executive VP & Chief Risk Officer4.9yrsCA$2.67m0.00055% CA$171.1k
Gordon Menzie
Senior Vice-President of Corporate Finance & Treasury0yrsno datano data
Philip Armstrong
Executive VP & Global Chief Information Officer4.1yrsCA$3.01m0.00012% CA$37.3k
Anne Sonnen
Senior VP & Chief Compliance Officer2.2yrsno datano data
Marlene Klassen
Assistant Vice President of Communications0yrsno datano data
Grace Palombo
Executive VP & Chief HR Officer5.3yrsno datano data

4.5yrs

Average Tenure

Experienced Management: 0AH3's management team is considered experienced (4.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Paul Mahon
President6.8yrsCA$7.12m0.016% CA$5.1m
Robert Reynolds
President & CEO of Putnam Investments LLC and Chair of Great West Lifeco U.S. LLC0.9yrsno datano data
Marcel Coutu
Independent Director12.8yrsCA$325.88k0.0011% CA$336.0k
André Desmarais
Director27.8yrsCA$52.69k0.038% CA$11.8m
Siim Vanaselja
Independent Director5.8yrsCA$534.26k0.0027% CA$840.1k
Brian Walsh
Independent Director10.8yrsCA$408.04kno data
Paul Desmarais
Director33.8yrsCA$291.88k0.011% CA$3.4m
Gregory Tretiak
Director7.8yrsCA$360.00kno data
Robert Orr
Chairman of the Board6.8yrsCA$427.88k0.0022% CA$672.1k
Paula Madoff
Independent Director1.8yrsCA$278.02kno data

7.3yrs

Average Tenure

62.5yo

Average Age

Experienced Board: 0AH3's board of directors are considered experienced (7.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: 0AH3 insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Great-West Lifeco Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Great-West Lifeco Inc.
  • Ticker: 0AH3
  • Exchange: LSE
  • Founded: 1891
  • Industry: Life and Health Insurance
  • Sector: Insurance
  • Market Cap: CA$31.116b
  • Shares outstanding: 926.34m
  • Website: https://www.greatwestlifeco.com

Number of Employees


Location

  • Great-West Lifeco Inc.
  • 100 Osborne Street North
  • Winnipeg
  • Manitoba
  • R3C 1V3
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
GWOTSX (The Toronto Stock Exchange)YesCommon SharesCACADJun 1986
GWSDB (Deutsche Boerse AG)YesCommon SharesDEEURJun 1986
GWLI.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDJun 1986
0AH3LSE (London Stock Exchange)YesCommon SharesGBCADJun 1986
GWO.PRITSX (The Toronto Stock Exchange)PFD 1ST SER ICACADApr 2006
GWO.PRNTSX (The Toronto Stock Exchange)5YR RATE PFD-NCACADNov 2010
GWO.PRQTSX (The Toronto Stock Exchange)1ST PFD SER Q %CACADJul 2012
GWO.PRSTSX (The Toronto Stock Exchange)1ST PFD SER SCACADMay 2014
GWO.PRTTSX (The Toronto Stock Exchange)5.15 FST PFD TCACADMay 2017

Biography

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 wealth savings and income, accumulation, and annuity products. It also provides employer-sponsored retirement savings plans, individual retirement 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; life, annuity/longevity, mortgage, and property catastrophe reinsurance; and pension products. The company offers its products under the under various brand names, including the Great-West Life, London Life, the Canada Life, the Freedom 55 Financial, the Irish Life, the Great-West Financial, the Empower Retirement, and the Putnam Investments. 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. is a subsidiary of Power Financial Corporation. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/25 23:29
End of Day Share Price2020/02/19 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.