GWLIF
Great-West Lifeco Inc.
$57.62
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 14.6% above fair value
You pay
$57.62
Bear
$39.13
Fair
$50.30
Bull
$65.39
Bear
$39.13
-32.1%
ROTCE 20.0% → 3.92x TBV
Fair
$50.30
-12.7%
ROTCE 25.0% → 4.00x TBV
Bull
$65.39
+13.5%
ROTCE 30.0% → 4.00x TBV
Key Value Driver
ROTCE (33.1%) vs. cost of equity (8.1%)
Implied Market Multiple
5.78x
Summary
With ROTCE of 33.1% vs. 8.1% cost of equity, fair P/TBV is 4.00x on $9.97 tangible book, implying $50.30 per share. DDM cross-check: $51.67.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Financial statements were converted from CAD into USD using USDCAD at 0.7240 USD per CAD.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly