1 Growth Stock With a 5.16% Yield to Buy Now for Dividend Income

This dividend stock is on the move, becoming a top growth stock that also offers a stable dividend currently at 5.16%.

| More on:
grow money, wealth build

Image source: Getty Images

Right now is a great time for investors to seek out dividend stocks. These dividend stocks can provide passive income during a volatile market, and that’s great! However, some dividend stocks out there are also in the growth stock category.

One such stock is Great-West Lifeco (TSX:GWO), with shares up 28% in the last year. What’s more, there haven’t been any rollercoaster-type drops in the last year. This is significant given the volatility of the Canadian market.

Therefore, let’s look at why GWO stock is a solid investment for investors wanting dividend income and growth.

Why GWO stock

This Canadian insurance and wealth management company is one of the largest insurance companies in Canada, with a strong track record of growth. The company is well-positioned to benefit from the growth of the global economy. That’s particularly true with a boost in demand for insurance and wealth management services.

In fact, over the last few years GWO stock has been growing rapidly. It now has several major insurance brands under its umbrella. Further, there is still room to grow, as the company has yet to really expand into Asia markets.

And that expansion could certainly happen sooner as opposed to later. GWO stock has a strong balance sheet, with a debt-to-equity ratio at just 35.5%. That means it would only take 35% of its equity to cover all its debts!

Dividends bound to keep growing

While the company should continue to grow in the future, GWO stock has a long history of growing its dividend as well. It has been increasing its dividend each year for the last 25 years, and that looks likely to continue. Especially after its most recent earnings results.

The company reported base earnings per share of $0.87, or $808 million, which was an increase of 14% from the year before. Net earnings came in at $0.64 or $595 million, which was down from $1.3 billion the year before. However, the company introduced “value drivers” to help drive continued growth in its business, thereby supporting dividend growth. This included its workplace, wealth and asset management, insurance and risk solutions.

“Our strong results reflect the successful execution of our integration programs in the U.S. and continued focus on delivering consistent performance in each of our core businesses. With the strategic acquisitions in the U.S. and of IPC in Canada, we are positioning our portfolio to deliver even greater value for clients, advisors, and shareholders.”

Paul Mahon, President and CEO, Great-West Lifeco

Get value today

Sure, shares of GWO stock are up 35% in the last year. That’s why it’s considered a growth stock. But there is still value to be latched onto today. Shares of GWO stock trade at an attractive 15 times earnings as of writing. It also trades at 0.71 times sales, and 1.6 times book value. All this points to the stock being quite valuable.

So is its dividend as well. GWO stock currently offers a dividend yield at 5.16%, which is higher than the trailing 12-month dividend yield of 4.93%. So with shares still climbing, more growth to come, and a solid dividend yield to consider, GWO stock is a solid buy on the TSX today.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Canadian Dollars
Dividend Stocks

Buy 734 Shares of This Top Dividend Stock for $9,574 a Year in Passive Income

Are you looking to earn regular income? Now is an opportune time to buy Dividend Aristocrats at discounts and accelerate…

Read more »

A plant grows from coins.
Dividend Stocks

This Ultra-High Yield Stock Just Hit a 52-Week Low, and it’s Still a Buy Today

Enbridge Inc (TSX:ENB) stock recently hit a 52-week low. Here's why.

Read more »

Payday ringed on a calendar
Dividend Stocks

This 6% Dividend Stock Pays Cash Every Month

Are you looking to earn cash every month from October 15 onwards? This 6% dividend stock gives you monthly payouts.

Read more »

Person slides down a stair handrail
Dividend Stocks

With a 7.6% Dividend, This TSX Stock Is One to Buy Now and Hold for Decades

Now is an opportune time to invest in this no-brainer TSX stock and get +$30 extra dividend for decades on…

Read more »

Portrait of woman having fun in the street.
Dividend Stocks

CPP Benefits Will Be Higher for Millennials and Gen Z

Older Canadians won't get enhanced CPP, but they may invest in dividend stocks like Royal Bank of Canada (TSX:RY).

Read more »

A plant grows from coins.
Dividend Stocks

The Best Dividend Stocks in Canada Right Now

Seeking to give a boost to your income portfolio, consider investing in these best Canadian dividend stocks.

Read more »

A close up image of Canadian $20 Dollar bills
Dividend Stocks

Retirees: Want Fast-Growing Passive Income? Here Are 3 Long-Term Dividend Stocks

Are you looking for dividend stocks that can grow their distributions very quickly? Here are three long-term picks!

Read more »

dividends grow over time
Dividend Stocks

2 Top Dividend Stocks You Can Buy and Hold Forever

The market is full of great dividend stocks, but not all are long-term gems. Here are two options that you…

Read more »