Investing $5,000 in the Canadian insurance sector can be a wise move for those looking to build long-term wealth. And three insurance stocks certainly look like strong options right now. So, let’s take a closer look at Manulife Financial (TSX:MFC), Power Corporation of Canada (TSX:POW), and Great-West Lifeco (TSX:GWO). Then, see why these might be excellent buy-and-hold stocks.
Manulife
Manulife Financial, one of Canada’s largest insurers, has been making headlines recently. In November 2024, the company announced that Phil Witherington, an insider with over 25 years of experience in insurance and financial services, will succeed Roy Gori as chief executive officer in May 2025. This leadership transition comes at a time when Manulife is showing robust financial health.
As of Dec. 31, 2024, Manulife reported assets under management and administration of $1.4 trillion, reflecting a 10% increase from the previous year. The insurance stock’s global presence, particularly in Asia, continues to be a significant growth driver.
Power
Power Corporation of Canada, a diversified international management and holding company, has substantial interests in financial services, renewable energy, and other sectors. In its third-quarter report for 2024, Power Corporation reported consolidated earnings of $634 million. That’s up from $567 million in the same period the previous year.
This increase was primarily driven by strong performances from its financial services subsidiaries. The insurance stock’s strategic focus on sustainable investments and renewable energy projects also positions it well for future growth.
Great-West
Great-West, a member of the Power Corporation group, has been delivering impressive results. In the fourth quarter of 2024, the insurance stock reported base earnings of $1.1 billion—a 15% increase from the same period in 2023.
For the full year, base earnings reached $4.2 billion, up 14% from the previous year. These record earnings were driven by strong performances across all business segments, particularly in the United States and Europe. As of Dec. 31, 2024, Great-West Lifeco’s assets under administration exceeded $3.2 trillion, underscoring its significant market presence.
Value and income
When considering past performance, all three companies have shown resilience and growth. Manulife’s stock has appreciated by 20% over the past year, reflecting investor confidence in its global strategy. Power Corporation’s diversified portfolio has provided steady returns, with its stock up 15% in the same period. Great-West Lifeco’s focus on core insurance and asset management businesses has resulted in a 25% stock price increase over the past year.
In terms of dividends, all three companies offer attractive yields. Manulife currently provides a dividend yield of 4.2% at writing, reflecting its commitment to returning value to shareholders. Power Corporation’s dividend yield stands at 4.5%, supported by its robust earnings from diversified investments. Great-West Lifeco offers a dividend yield of 4.3%, underpinned by its consistent financial performance.
Bottom line
For investors with $5,000 to invest, allocating funds across these three companies can provide a balanced exposure to the Canadian insurance sector. This approach offers diversification benefits, combining Manulife’s international growth prospects, Power Corporation’s diversified investment strategy, and Great-West Lifeco’s strong operational performance.
All together, Manulife Financial, Power Corporation of Canada, and Great-West Lifeco present compelling opportunities for long-term investors. The strong financial performances, strategic growth initiatives, and attractive dividend yields make them worthy considerations for those looking to invest in the Canadian insurance sector.
