Topic: How To Invest

The Successful Investor Hotline – Friday, July 23, 2021

Article Excerpt

GREAT-WEST LIFECO INC., $37.24, Toronto symbol GWO, is a hold. The company is Canada’s second-largest life insurer, after Manulife Financial. Power Corp. (Toronto symbol POW) owns 66.8% of the firm. Great-West, through its Empower Retirement division, is buying the full-service retirement business of U.S.-based Prudential Financial Inc. (New York symbol PRU). That unit covers 4,300 workplace savings plans with about 4 million participants and $314 billion U.S. in assets under administration. The purchase will increase Empower’s business to 71,000 workplace savings plans with 16.6 million participants and $1.4 trillion U.S. in assets under administration. The purchase price of $4.45 billion is equal to 13% of Great-West’s market cap (the total value of all outstanding shares) of $34.6 billion. The company expects to complete the transaction in the first quarter of 2022. Great-West expects cost savings from the merger will increase its annual per-share earnings by 8% to 9% by the end of 2023. For comparison, the company earned $2.88 a share in 2020. This is the…