Great-West Lifeco (TSE:GWO), one of the three big Canadian life insurance firms, reported its Q4-2022 and full-year earnings results after market close today. It also announced a 6% dividend increase to a quarterly rate of C$0.52 per share, implying a forward dividend yield of 5.9%.
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For the quarter, GWO reported base earnings per share (EPS) of C$0.96, beating the consensus estimate of C$0.88 and representing a growth rate of 7.9% compared to Q4 2021’s base EPS of C$0.89. Total base earnings (a non-GAAP earnings measure) increased to C$892 million from C$825 million.
Meanwhile, net earnings per share rose 34.1% year-over-year to C$1.10. GWO attributes its growth to increased new business growth in its Capital and Risk Solutions business as well as earnings from Prudential Financial’s (NYSE:PRU) Retirement Services business, which it acquired.
Additionally, Great-West’s return on equity (using base earnings) came in at 13.6%, lower than the 14.6% recorded in Q4 2021. Notably, the company’s consolidated assets grew 11% to C$701 billion, while assets under administration increased by 9% to C$2.5 trillion.
For the full year, Great-West Lifeco recorded base earnings per share of C$3.455, 1.5% lower year-over-year. However, its five-year compound annual growth rate is 8.8%, in line with its target of 8%-10%. Further, the company’s full-year base return on equity came in at 13.6%, 50 basis points higher than its five-year average but lower than management’s 14%-15% target.
Is GWO Stock a Buy, According to Analysts?
According to analysts, GWO stock earns a Hold consensus rating based on four Hold ratings assigned in the past three months. The average GWO stock forecast of C$36.00 implies 2.5% upside potential.
