The Lazy Canadian’s Path to a Bigger Retirement: 1 Stock to Start With

This Canadian stock’s growing earnings, expanding retirement platform, and steady shareholder returns make it a compelling long-term holding for retirement investors.

Key Points
  • Great-West Lifeco shares have gained 72% over the last year while still offering a 2.9% annualized dividend yield.
  • The company’s second-quarter base earnings jumped 15% YoY to $1.42 per share.
  • Empower's Milliman acquisition expanded its footprint to over US$2.3 trillion in client assets.

Investing in the stock market doesn’t always have to be complicated, especially when you’re building a retirement portfolio that may have decades to grow. In fact, constantly buying, selling, and chasing the market’s next big winner could make investing feel like far more work than it needs to be. I’d rather find a strong business that can keep growing earnings, pay me dividends along the way, and give compounding enough time to work.

Great-West Lifeco (TSX: GWO) fits that approach surprisingly well. Its shares have surged by 72% over the last year, and the business has been improving as well. In this article, I’ll explain why Great-West Lifeco could be one stock to start with for Canadians who want a simpler path toward building a bigger retirement portfolio.

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Great-West Lifeco stock

If you want to keep your retirement strategy simple, Great-West Lifeco gives you a large and diversified financial services business to consider. Headquartered in Winnipeg, Great-West operates across Canada, the United States, and Europe through brands such as Canada Life, Empower, and Irish Life. Its operations cover retirement, wealth management, group benefits, insurance, annuities, and risk solutions.

Up 38% year-to-date, GWO stock currently trades at $93.34 per share, giving the company a market cap of $83.5 billion. Even after that strong run, the stock still offers an annualized dividend yield of 2.9%.

This rally in the stock has mainly been supported by the company’s improving performance. Notably, Great-West delivered double-digit earnings growth, rising client assets, stronger returns on equity, and continued share repurchases.

Earnings growth strengthens its fundamentals

For a relatively hands-off retirement strategy, you need to make sure that the company you’re investing in has the ability to compound its earnings for many years. And Great-West appears well positioned on that front.

In the second quarter of 2026, its base earnings climbed 15% year-over-year (YoY) to about $1.42 per share. The financial services company’s net earnings also jumped 20% from a year ago to $1.16 per share. Growth in its retirement and wealth businesses, led by Empower, was a major driver of those solid results, while strong new business growth in its capital and risk solutions also helped.

At the same time, Great-West’s U.S. segment delivered a 34% YoY increase in base earnings in constant currency, backed by higher fee income, favourable markets, and positive plan and wealth net inflows.

As a result, the company posted a 19.3% base return on equity, up from 17.4% a year ago. Its total client assets reached about $3.7 trillion at the end of the quarter, reflecting 12% growth from the end of the previous year.

A bigger retirement platform

In September, its Empower subsidiary completed the acquisition of Milliman’s retirement plan and benefits administration business. The transaction added roughly 400 defined benefit plans with about 790,000 participants and US$80 billion in client assets. It also added more than 1,100 defined contribution plans representing about 750,000 participants and more than US$50 billion in client assets.

Following the deal, Empower’s footprint expanded significantly to over US$2.3 trillion in client assets and 96,000 workplace plans. This larger platform should give Great-West more scale across retirement and workplace benefits services going forward.

These are some of the key reasons why I believe Great-West stock offers Canadians an appealing combination of earnings growth, retirement-focused expansion, dividends, and share buybacks. That’s why GWO could be an attractive stock to buy and hold while compounding does the rest, especially for investors looking for a simpler path toward a bigger retirement portfolio.

Fool contributor Jitendra Parashar 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.

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