Great West Lifeco (GWO.TO)

Great West Life (GWO-T) or Power Financial (PWF-T)? Power Financial owns Great West Life, so you get both if you own Power Financial. Have both had pretty nice moves and they have equivalent yields. They trade in a band, so you could choose either one. 10% from now he would be looking to trim as it has done quite well and is getting up there.

Just came out with earnings and they were okay. This is a great company and has always been well run. Has always got one of the higher multiples in the sector. Of the lifecos, this is the best there is. Feels that they are just a little bit ahead of themselves. You’re better off owning banks at these levels as you get a much cheaper valuation with possibly a little better yield. Also, prospects are better down the road.

(A Top Pick August 27/12. Down 0.2%.) 5.4%, Series P. . All 3 picks are down because over the summer, there was a perfect storm of events including 1) the tapering, 2) index rebalances in preferred shares (ETFs must exchange their holdings), which drove prices down and 3) in August there was a program trade go through which drove them down even further.

Just sold his holdings. Had a nice run. Insurance companies are certainly going to benefit if rates rise and equity markets move up. He is seeing a little bit of topping in the last little while although the trend is still there. It is susceptible to come down to the $27-$28 range. Looks like it is time for a pause. 4% dividend.

Very high quality life insurance company. Never had the issues with market sensitivity that the others had. Very safe name. 4% dividend increases over time.

Lifecos are just starting into the reporting period and he thinks we are going to see a relatively good quarter. This is one that has always returned a more consistent ROE.

The period of seasonal strength for financials is normally in the springtime. He would avoid it until then. It is showing signs of rolling over.

Price to book is more expensive than Sun Life (SLF-T) or Manulife (MFC-T). Just did the Irish life transaction which will be very accretive for them.

(See Top Picks for the insurance company that he prefers.) Likes the insurance space because they fund their liabilities through their investments. They can re-deploy a lot of cash now. Reasonable dividend (4.5%) and valuation. Prefers MFC-T. You can also buy Power Financial Corp which holds GWO-T.

(A Top Pick March 30/12. Up 17.3%.) Completed the acquisition of Irish Life which will add about $0.10-$0.12 in earnings next year. They are overdue to raise the dividend and expects this later this year or early next year.

(A Top Pick Feb 29/12. Up 7.8%.) Preferred P series 5.4%. This is a perpetual. He is bullish on the market so he wants to be a bit longer-term.

Acquired Irish Life Group, which will be accretive as they got this at a bargain price. Owns this through Power Financial (PWF-T).

(Market Call Minute.) It’s a complicated business down in the US and they are struggling with it.

With this lifeco, your dividend is solidly and safely covered. 4.84% yield. He is looking for stocks that are cheap with a good yield for the coming year. Wouldn’t be surprised if it got 15%-20% higher from here.

(Market Call Minute.) Wake him up when it is all over. Just can’t get fired up on the lifecos right now.