Great-West Earnings: Higher Interest Rates and Stable Underwriting Drive Decent Results

No-moat-rated Great-West Life reported a decent set of numbers in the third quarter as the company benefited from higher interest rates and underwriting profitability remained solid. The company reported core earnings of CAD 0.95 billion or CAD 1.02 per share in the third quarter versus CAD 0.81 billion or CAD 0.87 per share in the third quarter of the previous year. The third-quarter results equated to an annualized core return on equity of 16.4%, which is in line with the company’s long-term target of 16%-17%. The company paid a quarterly dividend of CAD 0.52 per share in the third quarter of 2023, which represents a 5.2% dividend yield as per the current stock price. We are maintaining our CAD 38 fair value estimate for Great-West Life after incorporating the third-quarter results.