Great-West Lifeco (TSX:GWO) stock is an intriguing passive income and growth play to check out right now. The Canadian financial sector giant is undergoing a management transition following the July 1, 2025 retirement of former CEO Paul Mahon after nearly four decades with the insurance and asset management powerhouse. The stock has generated more than 11% in total shareholder returns so far this year, and Canadian investors keep asking the perennial question about Great-West Lifeco stock: Is it a buy, sell, or hold?
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Great-West Lifeco’s management change in July
July 2025 marks a significant, yet well-managed, transition: the retirement of long-time CEO Paul Mahon and the appointment of David Harney as the new Great-West Lifeco CEO. Harney is a seasoned company veteran with over 35 years of experience, most recently leading its European and Capital Risk Solutions operations.
The company portrays the transition as deliberate and smooth, emphasizing the depth of its leadership bench and continuity in strategy. Harney has expressed strong confidence in meeting the company’s enhanced financial objectives. Harney inherits a behemoth that’s enjoying growth momentum. The new blood might have some new business growth tricks under his sleeve. I see no compelling reason yet to discount GWO stock for this management change in July.
Why to buy and hold GWO stock
One of the most compelling reasons to consider Great-West Lifeco stock in July 2025 is its consistent earnings growth profile, particularly within its capital-efficient retirement and wealth management segments. The first quarter of 2025 saw a remarkable 24% year-over-year surge in Lifeco-Retirement base earnings, complemented by a 13% increase in Lifeco-Wealth base earnings. This growth may continue as assets under management (AUM) increase.
By the end of March 2025, the company’s total assets under management (AUM) hit a staggering $1 trillion, and total client assets exceeded $3 trillion. Scale is important in the financial services sector. This substantial scale positions GWO as a fee-earning blue-chip stock, offering stability, steady capital growth, and reliable passive income for a core portfolio.
Further, the company’s diversified business model also means no single segment accounts for more than a third of its normalized earnings. This adds to its earnings stability. Furthermore, approximately 93% of the company’s assets were in fixed income going into the second quarter, with 99% of those financial assets being investment grade, reflecting a prudent and low-risk investment approach as trade wars threatened to alter asset risk profiles in 2025.
Most noteworthy, Great-West Lifeco also stands out as a reliable source of passive income. The stock currently offers a quarterly dividend, yielding an attractive 4.7% annually. The company has been on a dividend-growth spree since 2015, and management is committed to this shareholder-friendly approach. The dividend paid in 2025, at $0.61 per share quarterly, is a solid 9.9% higher year-over-year. Over the past decade, Great-West has raised dividends at an average rate above 6% annually. There are strong indications that shareholders can look forward to another decade or more of dividend growth.
Great-West stock’s compelling total returns profile
Beyond dividends, Great-West Lifeco has also delivered impressive total shareholder returns. Capital gains over the past five years have exceeded 16% annually, outperforming key benchmarks, including the S&P/TSX Composite. Thanks to its generous dividend policy, total returns to investors in Great-West Lifeco stock have surpassed 22% annually. The company’s commitment to returning value to shareholders extends to share repurchases. Management intends to spend $500 million on buybacks in 2025, in addition to repurchases to offset employee compensation plan dilution.
An investment in Great-West Lifeco stock has handily outperformed the TSX over the past half decade.
From a valuation perspective, Great-West Lifeco stock currently trades at a forward price-to-earnings (P/E) ratio of 10.3. Its forward price-earnings-to-growth (PEG) ratio of 1.2 suggests that shares are fairly valued given the financial giant’s earnings growth outlook.
Investor takeaway
Considering Great-West Lifeco’s strong market position, consistent earnings growth in key segments, attractive and growing dividend, impressive (historical) total shareholder returns, and disciplined financial management, Great-West Lifeco stock appears to be a compelling “Buy and Hold” for investors seeking stability, income, and long-term capital appreciation in July 2025.
