GWO & IAG: Two insurance stocks to watch in June

May 31, 2023 08:44 AM EDT | By Akanksha Vashisht
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  • Insurance companies are a cog in the wheel for the financial sector as they generally have steady profits and low debt levels.
  • Great-Life, one of the largest insurance companies in Canada, reported net earnings of CA$ 627 million for Q1 2023.
  • iA Financial operates across many financial segments other than insurance and has net income attributable to shareholders of CA$ 273 million.

The central bank’s continuous rate hikes have made the Canadian financial sector an interesting watch. Insurance companies offer coverage for various kinds of unprecedented instances, that may also sometimes be casualty insurers and financial guarantors.

However, accident and health insurance companies are typically the most well-recognized insurers. Many insurance companies have the reputation of having stable profits and low levels of debt. On that note, GWO and IAG are two Canadian insurance stocks that can be examined in June 2023.

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Great-West Lifeco Inc. (TSX: GWO)

Great-West Lifeco is an insurance giant in Canada, with its operations spanning across the US and Europe as well. The company offers individual and group insurance in Canada. The company acquired Personal Capital and MassMutual’s recordkeeping businesses in 2020.

Image source: ©2023 Kalkine®; Data source: Company Reports

For the March 2023 quarter, the insurance company reported net earnings of CA$ 627 million, as opposed to CA$ 1.059 billion in the December 2022 quarter. The total revenue was CA$ 10.6 billion during the March 2023 quarter. The net income attributable to common stockholders was CA$ 595 million in the quarter.

Great-West’s operating cash flow was negative CA$ 1.034 billion during the March 2023 quarter. Great-West pays a quarterly dividend of CA$ 0.52.

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iA Financial Corp Inc. (TSX: IAG)

Apart from being an insurance company, iA financial offers savings and mutual funds, securities, retirement plans, auto and home insurance among its other services. It has five main operating areas which include Wealth Management, Group Insurance and Group Savings amid others.

For Q1 2023, iA Financial reported net income attributable to shareholders of CA$ 273 million. Among this, the income attributable to common shareholders was CA$ 270 million for the quarter.

Image source: ©2023 Kalkine®; Data source: Company Reports

An increase in its dividend of 13% was reported for the quarter and strong sales across Canada and US were also announced by iA Financial. The insurance company paid a quarterly dividend of CA$ 0.675 to common shareholders in Q1 2023. For the second quarter of 2023, a dividend of CA$ 0.765 per share has been authorized by the Board of Directors.



Please note, the above content constitutes a very preliminary observation based on the industry and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.


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