Great-West Lifeco (GWO) AI Stock Analysis

• Market Cap: C$48.07B
• Dividend Yield: 6.47%
• Average Volume (3M): 3.81M
• Price to Earnings (P/E): 12.6
• Beta (1Y): 0.52
• Revenue Growth: 17.48%
• EPS Growth: 25.54%
• Country: CA
• Employees: 33,250
• Sector: Financial
• Sector Strength: 79
• Industry: Insurance - Life
• EPS (TTM): 1.11
• Shares Outstanding: 928,051,300
• 10 Day Avg. Volume: 2,834,916
• 30 Day Avg. Volume: 3,811,957
• PEG Ratio: -0.62
• Price to Book (P/B): 1.39
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 5.15
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$54.71
• Price Target Upside: 5.62% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 7

• Rating: 73 Outperform
• Price Target: C$57.00 ▲(10.04%Upside)

Great-West Lifeco's robust earnings performance and strategic corporate events are major strengths, while technical indicators and valuation suggest moderate near-term potential. Revenue consistency and liability management remain areas to watch.

Positive Factors

Financial Performance

The company has increased its medium-term base ROE target to over 19%, reflecting a strong focus on generating higher returns.

Growth Potential

Empower's 'double-digit' targeted growth is identified as a key driver for the company's future earnings potential.

Shareholder Value

Great-West Lifeco earmarks $500mm for share buybacks, enhancing shareholder value.

Negative Factors

Earnings Visibility

Earnings visibility is challenged by the often lumpy and opaque Empower, Europe, and Capital & Risk Solutions segments.

Leverage

Great-West Lifeco's pro forma leverage remains elevated at an estimated 29%.

Valuation Concerns

The generally full valuation at 11.8x NTM base EPS and earnings visibility challenges in the Europe/Capital & Risk Solutions segments create concerns.

Great-West Lifeco Business Overview & Revenue Model

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.

How the Company Makes Money

Great-West Lifeco generates revenue through multiple streams, primarily from premiums collected on life and health insurance policies, as well as fees from investment management and retirement services. The company earns money from underwriting insurance policies, where it charges premiums to its policyholders and invests the premiums in a variety of assets to generate returns. Additionally, Great-West Lifeco earns management fees from its asset management services, which include mutual funds and other investment products. The company also benefits from strategic partnerships and acquisitions, which expand its market reach and diversify its product offerings. Interest income from its invested assets and reinsurance agreements further contribute to its earnings.

Great-West Lifeco Financial Statement Overview

Summary

Great-West Lifeco presents a generally robust financial position with strong profitability and efficient cash flow management. Despite some inconsistencies in revenue growth and a relatively high reliance on liabilities, the company has maintained sound profitability margins and leverage ratios. Continued focus on revenue stability and leveraging cash flow effectively will be crucial for sustaining its financial health.

Income Statement

Great-West Lifeco shows a solid gross profit margin at 83.48% for TTM, indicating strong profitability. The net profit margin for TTM is 17.34%, which is healthy given the industry's nature. However, revenue growth has been inconsistent, with a notable decline from 2022 to 2023, impacting the overall score. The EBIT margin for TTM at 31.65% is strong, but the EBITDA margin is lower than EBIT due to adjustments, highlighting some volatility in operational efficiency.

Balance Sheet

The company's balance sheet is stable, with a debt-to-equity ratio of 0.32, indicating moderate leverage. The return on equity for TTM is 13.27%, reflecting efficient use of equity. However, the equity ratio of 3.72% shows a heavy reliance on liabilities, which could pose risks if market conditions change. Overall, the balance sheet suggests a well-managed but highly leveraged financial structure.

Cash Flow

The cash flow statement highlights strong free cash flow generation with a favorable operating cash flow to net income ratio of 1.09 for TTM. The free cash flow to net income ratio is also healthy at 1.09, indicating effective cash management. However, the decrease in free cash flow compared to previous periods reflects in the score, suggesting potential areas for improvement in cash flow sustainability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	22.88B	17.22B	25.27B	44.70B	64.45B	60.60B
Gross Profit	19.10B	17.22B	25.27B	44.70B	64.45B	60.60B
EBITDA	5.58B	5.93B	4.00B	3.72B	4.74B	3.82B
Net Income	3.97B	4.07B	2.87B	3.73B	3.26B	3.08B
Balance Sheet
Total Assets	804.14B	802.16B	713.23B	701.46B	630.49B	600.49B
Cash, Cash Equivalents and Short-Term Investments	25.99B	24.71B	19.38B	18.84B	17.23B	7.95B
Total Debt	9.54B	10.23B	9.65B	11.29B	9.73B	10.71B
Total Liabilities	771.05B	771.01B	683.38B	669.14B	600.00B	573.48B
Stockholders Equity	29.91B	29.54B	26.84B	29.01B	27.22B	24.03B
Cash Flow
Free Cash Flow	4.33B	4.75B	5.20B	7.05B	10.37B	9.61B
Operating Cash Flow	4.33B	4.75B	5.20B	7.05B	10.37B	9.61B
Investing Cash Flow	-196.00M	-408.00M	-786.00M	-5.49B	-11.21B	-8.20B
Financing Cash Flow	-2.44B	-2.29B	-3.55B	-620.00M	-992.00M	2.01B

Great-West Lifeco Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 51.80
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:GWO, the sentiment is Positive. The current price of 51.8 is above the 20-day moving average (MA) of 51.02, above the 50-day MA of 51.27, and above the 200-day MA of 48.78, indicating a bullish trend. The MACD of -0.02 indicates Negative momentum. The RSI at 56.37 is Neutral, neither overbought nor oversold. The STOCH value of 86.54 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:GWO.

Great-West Lifeco Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GWO	73 Outperform	C$48.07B	12.57	14.65%	6.47%	17.48%	25.54%
Sector *	67 Neutral	$16.66B	11.44	9.71%	3.92%	11.61%	-10.70%
MFC		$54.76B	16.63	10.17%	3.97%	―	―
SLF		$37.26B	16.70	13.18%	3.89%	―	―
FRFHF		$43.19B	9.70	17.21%	0.84%	―	―
IAG	81 Outperform	C$13.53B	15.36	12.54%	3.34%	-7.31%	28.65%
POW	74 Outperform	C$34.18B	12.80	11.92%	6.22%	7.63%	8.84%

Great-West Lifeco Corporate Events

Canada Life Reinsurance Shifts Focus to Structured Reinsurance

Canada Life Reinsurance, a subsidiary of Great-West Lifeco, announced a strategic shift by ceasing new business for its U.S. traditional life mortality risk reinsurance line to focus more on structured reinsurance markets. This decision aims to allocate more resources to structured solutions, longevity reinsurance, and catastrophe retrocession, while ensuring a smooth transition for existing clients and maintaining high service levels for its inforce business.

The most recent analyst rating on (TSE:GWO) stock is a Hold with a C$54.00 price target. To see the full list of analyst forecasts on Great-West Lifeco stock, see the TSE:GWO Stock Forecast page.

Great-West Lifeco Appoints Lindsey Rix-Broom as CEO of European Operations

Great-West Lifeco has appointed Lindsey Rix-Broom as CEO of its European operations, effective July 1, 2025. Rix-Broom, who currently leads Canada Life U.K., is recognized for her leadership and strategic focus, having driven significant growth and modernization in the U.K. market. Her appointment is part of a broader leadership transition, with David Harney taking over as President & CEO of Great-West Lifeco and Canada Life. This strategic move aims to strengthen Lifeco’s presence in Europe, particularly in the U.K., Ireland, and Germany, as the company continues to focus on delivering sustainable growth and value.

The most recent analyst rating on (TSE:GWO) stock is a Hold with a C$54.00 price target. To see the full list of analyst forecasts on Great-West Lifeco stock, see the TSE:GWO Stock Forecast page.

Great-West Lifeco Elects Full Slate of Directors, Ensuring Leadership Stability

Great-West Lifeco announced the election of all 19 director nominees during its Annual and Special Meeting of Shareholders. The election results showed strong support for the nominees, indicating stability and continuity in the company’s governance. This decision is expected to reinforce Great-West Lifeco’s strategic direction and maintain its robust position in the financial services industry, benefiting stakeholders by ensuring consistent leadership.

Great-West Lifeco Reports Strong Q1 2025 Results with Focus on U.S. Growth

Great-West Lifeco reported strong first quarter 2025 results, with base earnings of $1.0 billion, marking a 5% increase from the previous year, driven by growth in its Retirement and Wealth businesses. Despite a 17% decline in net earnings from continuing operations due to unfavorable market conditions, the company maintained a robust capital position with a LICAT ratio of 130% and continued its strategic focus on capital-efficient growth, particularly in the U.S. segment, which contributed significantly to its performance.

Great-West Lifeco Announces Leadership Transition

Great-West Lifeco announced the retirement of Paul Mahon as President and CEO, effective July 1, 2025, with David Harney set to succeed him. Mahon, who has been instrumental in repositioning the company and leading it through significant transformations, will remain as a Senior Advisor until early 2026 to ensure a smooth transition. Harney, with over 35 years at the company and a proven track record in leadership roles, is expected to continue driving Lifeco’s growth strategy and strengthening its market presence.

Great-West Lifeco to Announce Q1 2025 Results and Hold Annual Meetings

Great-West Lifeco announced it will release its first quarter 2025 financial results on May 7, with a subsequent earnings conference call and webcast scheduled for May 8. The company will also hold its Annual and Special Meetings on May 8, allowing registered shareholders and policyholders to participate in person or virtually. These events are significant as they provide stakeholders with insights into the company’s financial performance and strategic direction.

Great-West Lifeco Updates Financial Objectives at 2025 Investor Day

Great-West Lifeco Inc. hosted its 2025 Investor Day in Toronto, focusing on the theme ‘Driving Growth, Delivering Lasting Value.’ The company updated its medium-term financial objectives, including an increase in its Base Return on Equity objective to 19% or more, up from 16-17%. Additionally, it introduced a new objective for Base Capital Generation of 80% or more and reaffirmed its confidence in achieving Base EPS growth of 8-10% and a Base Dividend Payout Ratio of 45-55%. These updates reflect the company’s strategic focus on building market-leading franchises and delivering value for shareholders through strong cash and capital generation.