Great West Lifeco (GWO.TO)

GWO vs MFC vs SLF? In general, he thinks all insurance companies are safe here. They don't have the threat of rising loan losses, like the banks do. They trade cheaper than the banks. Capital ratios are solid. They are finding ways to deal with low interest rates. GWO has a good job. MFC is very cheap, compared to its peers. SLF has been the steady eddy of the group. He likes them all. He would buy now, but you might be able to purchase them cheaper in the next couple of months.

All lifecos have underperformed. GWL has great assets in Canada, but Putnam Investments in the U.S. has been a drag on them. That said, lifecos are steady and will benefit from rising interest rates. She prefers others in this space.

He owns Prudential instead. Should be a terrific time to own an insurer, but it’s not. Flattening yield curve is hurting them. Would wait to see movement in the long rates before buying. US should kick rates higher, which should help. Own the banks, which automatically benefit from growth.

He likes the lifecos now, because interest rates are rising. He owns other insurers instead. They've had problems after buying Puttnam Investments; maybe that's turning around now. It's always looked expensive against its peers, yet he doesn't see the same level of growth.

A sideways pattern where you buy around $32 and sell near $37.

You expect all lifecos to do well on a rising interest rate environment. It is surprising that we haven’t had the big trade on the lifecos. He will gravitate toward banks more than lifecos now. He feels uncomfortable with the group at the moment.

At these levels he is predisposed towards lifecos. They underperformed the market, but things are setting up better for them with rising interest rates. He prefers Manulife Financial Corporation (MFC-T) but both are good long-term investments.

This is a good space. High dividends. Growth. Positive demographics. Doesn't know GWF as well as Sunlife or Manulife, but should get moderate to strong returns.