Two insurance stocks can offer similar income while sending your money into quite different businesses. One may lean more heavily on retirement accounts and wealth services, while another brings more exposure to growing Asian insurance markets. I’d choose based on the payment, the earnings behind it, and the risks I’m adding.
A person stands in front of several doors representing different U.S. stock options for Canadian investors.
GWO
An insurer has to keep capital for the promises it makes to customers. Sending every dollar of profit to shareholders would leave little room for claims, market shocks, or growth. For dividend investors, a sensible retained portion can be just as valuable as the cash arriving today.
Great-West Lifeco (TSX: GWO) operates through businesses including Canada Life, Empower, and Irish Life. Its retirement and wealth operations give it opportunities to earn fees from customers’ savings, alongside insurance and risk businesses. That broadens the earnings mix beyond collecting premiums and paying claims.
Third-quarter base earnings reached $1.48 per share. This is management’s adjusted operating measure. Against the $0.67 quarterly dividend, the payment uses about 45%, leaving more than half of those earnings within the business on that comparison.
Great-West’s base earnings per share rose 11%, supported by retirement and wealth activity as well as repurchases. For shareholders, increasing profit per share gives future dividends more support than simply announcing a larger amount of customer assets. The risk is that market weakness can reduce fee income while insurance experience becomes less favourable. A retirement platform has recurring demand, but its earnings aren’t immune to a falling market.
MFC
Manulife Financial (TSX: MFC) offers insurance, wealth, and asset management across North America and Asia. I’d choose it partly for that geographic mix, with the understanding that overseas growth also brings different economic conditions, currencies, and regulations.
Manulife’s third-quarter core earnings were $1.24 per share. Its $0.49 quarterly dividend used about 39% of that adjusted measure. That leaves a somewhat larger retained portion than Great-West’s comparison, although the companies’ adjustments and business mixes differ.
I like having room for reinvestment and adverse insurance experiences. I’d still read reported profit alongside core earnings because market losses and assumption changes affect shareholders too. A favourable payout comparison doesn’t erase the cost of a disappointing investment portfolio.
Considerations
Here are alternative $10,000 purchases at recent closes, with whole shares and no fees. Manulife produces about $19 more annual income on that budget. Its yield is about 3%, against Great-West’s approximately 2.8%. The gap is small enough that I’d put business quality, growth, and portfolio fit ahead of squeezing out the last dollar of starting income.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | ANNUAL DIVIDEND | ANNUAL TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| GWO | $94.40 | 105 | $2.68 | $281.40 | Quarterly | $9,912.00 |
| MFC | $64.17 | 155 | $1.94 | $300.70 | Quarterly | $9,946.35 |
I’d narrowly choose Manulife for the combination of starting income, retained adjusted earnings, and Asian growth exposure. Great-West would suit someone who prefers its retirement and wealth platform, particularly if they already have substantial Asian financial exposure elsewhere.
I’d buy either in stages rather than treat the latest strong result as permission to pay any price. Insurers can face larger claims, investment losses, and changes in assumptions. Those risks are a reason to keep other Canadian dividend stocks earning alongside them.
For longer-term context, Manulife’s published five-year total return through 2025 grew $100 to $281.09 with dividends reinvested. That’s about 23% compounded annually. It demonstrates what strong business and market conditions delivered, while giving me no reason to budget for the same pace again.
Bottom line
Manulife gets my next income allocation inside a Tax-Free Savings Account (TFSA), where enough room is available. I’d reinvest while working and let future earnings determine the pace of dividend growth. Great-West remains a credible alternative, with the best choice depending more on the business you prefer to hold long term than on a modest difference in today’s cheque.
