The Best Canadian Insurance Stocks: The House Always Wins

The Canadian insurance sector has been interesting to watch during these past years with our low-interest rate climate.

Not all insurance stocks have benefited from the market growth but is it time to get back in? Some of them offer a juicy dividend to wait.

Being that many are cash cows with relatively low debt, I would consider the dividend safe and with interest rate increases coming our way, we should see some higher profits from the insurance industry in due time.

Overall, I have found the industry to be disappointing for growth but it could be a proxy to income at these levels.

Below is a list of insurance stocks for the Canadian stock market for your consideration.

Best Canadian Insurance Stocks

The best investment should at least provide you with some dividend growth. If it can’t raise the dividend, it isn’t growing …

1. Manulife

MFC - Manulife Manulife Financial Corporation is a leading international financial services company in Canada. The company provides financial advice, insurance, as well as wealth and asset management solutions for individuals, groups, and institutions.

Manulife offers unique product offerings for different markets it serves. The company provides a suite of financial protection and wealth management solutions to meet the current and future needs of individual and group customers. The company also owns reputed brands like Manulife and John Hancock in the USA.

Manulife serves 26 million customers in the USA, Canada, and Asia. With more than 125 years of experience, the company has developed strong customer relations and a deep understanding of their financial needs. Clients look to Manulife for reliable and intelligent financial solutions.

Key Investment Data

  • Ticker: TSE:MFC
  • Sector: Financial Services
  • Industry: Insurance - Life
  • Market Cap: 45.24B
  • P/E: 6.85
  • Dividend Yield: 5.67%
  • Payout Ratio (TTM): 32.90%

2. Great West Life

GWO - Great West Life Great-West Lifeco is a financial services company providing life and health insurance, retirement and investment services, asset management and reinsurance businesses.

In addition to providing traditional insurance products, the company also provides certain products on a fee-for-service basis such as segregated funds and mutual funds. Great-West Lifeco is a member of the Power Financial Corporation group of companies. It has over $1.3 trillion in total assets under administration as of December 2017.

Great-West Lifeco operates through Great-West Life, London Life, Canada Life, Irish Life, Great-West Financial and Putnam Investments in Canada, the United States and Europe. In the U.S., Great-West Financial is a leading provider of employer-sponsored retirement savings plans in the public and corporate sectors.

Key Investment Data

  • Ticker: TSE:GWO
  • Sector: Financial Services
  • Industry: Insurance - Life
  • Market Cap: 34.56B
  • P/E: 10.55
  • Dividend Yield: 5.28%
  • Payout Ratio (TTM): 49.70%

3. Intact Financial

IFC - Intact Financial Intact Financial Corporation is the largest provider of property and casualty insurance in Canada and a leading provider of specialty insurance in North America. The company’s popularity can be gauged from the fact that about one in every five Canadians is a customer of Intact Financial products and services.

The company enjoys a 17% share in the P&C insurance market in Canada. In terms of business segments, personal and auto accounts for nearly 40% of DPW (direct premium written), followed by personal property (20%), commercial lines Canada (25%) and commercial lines USA (15%).

About 85% of the company’s revenue is derived from Canada and the remaining 15% is from the U.S. The company operates through Intact insurance, BrokerLink, OneBeacon and Belairdirect banners.

Key Investment Data

  • Ticker: TSE:IFC
  • Sector: Financial Services
  • Industry: Insurance - Property & Casualty
  • Market Cap: 28.59B
  • P/E: 14.44
  • Dividend Yield: 2.24%
  • Payout Ratio (TTM): 34.10%

4. Industrial Alliance

IAG - Industrial Alliance Industrial Alliance is a leading insurance and wealth management company in Canada. The company manages more than $180 billion in assets and over 4 million client accounts.

It also distributes creditor insurance products, car loan financing, and property & casualty products through a Canada wide distribution network. Industrial Alliance operates through individual insurance (15% of 2018 revenues), individual wealth management (40%), group insurance (18%), group savings and retirement (18%), U.S. operations (5%) and other (4%) divisions.

The company deploys an extensive distribution network, With more than a century old existence, Industrial Alliance has developed the necessary expertise and portfolio of products and solutions to cater to the diverse financial needs of its clients. The company is targeting to grow its EPS by at least 10% annually till 2022.

Key Investment Data

  • Ticker: TSE:IAG
  • Sector: Financial Services
  • Industry: Insurance - Diversified
  • Market Cap: 7.44B
  • P/E: 9.37
  • Dividend Yield: 3.62%
  • Payout Ratio (TTM): 22.20%

5. Power Corporation

POW - Power Corporation Power Corporation is a diversified international management company engaging in financial services, asset management, and renewable energy businesses.

The company has a presence in North America, Europe, and Asia and caters to more than 30 million customers worldwide. Power Corporation has a diversified business model and operates through its subsidiaries like Power Financial, Power Energy, Sagard Funds, China Asset Management, and Square Victoria Communications Group.

Its principal asset is its controlling interest in Power Financial. Power Corporation manages businesses and investments capable of generating sustainable and stable earnings growth. Founded in 1925, today Power Corporation owns some of the strongest financial service brands in North America and Europe.

Key Investment Data

  • Ticker: TSE:pow
  • Sector: Financial Services
  • Industry: Insurance - Life
  • Market Cap: 25.94B
  • P/E: 9.74
  • Dividend Yield: 4.75%
  • Payout Ratio (TTM): 42.90%

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DISCLOSURE: Please note that I may have a position in one or many of the holdings listed. For a complete list of my holdings, please see my Dividend Portfolio.

DISCLAIMER: Please note that this blog post represents my opinion and not an advice/recommendation. I am not a financial adviser, I am not qualified to give financial advice. Before you buy any stocks/funds consult with a qualified financial planner. Make your investment decisions at your own risk – see my full disclaimer for more details.