Nice-West Lifeco (TSX:GWO), the Canadian monetary providers holding agency, just lately introduced its monetary outcomes for the fourth quarter of 2023. The corporate delivered document base earnings, additionally encouraging its administration to generously improve dividends.

The Winnipeg-headquartered firm has impressed in quite a lot of monetary providers companies, together with life insurance coverage, medical health insurance, funding providers, and asset administration. Apart from its dwelling market, it at the moment generates a big portion of its earnings from Europe and america.

On this article, I’ll spotlight three prime causes that make Nice-West Lifeco inventory value contemplating after its newest quarterly outcomes. Let’s take a better look.

Report base earnings and monetary progress

Within the December 2023 quarter, Nice-West Lifeco reported a document base adjusted internet revenue of $971 million, up 8.9% YoY (yr over yr). This translated into adjusted earnings of $1.04 per share, exceeding Road analysts’ expectations of $1.01 per share.

This improve mirrored the corporate’s continued concentrate on strategic repositioning and funding in enhancing its portfolio. Notably, Nice-West’s full-year base earnings climbed to $3.7 billion, registering an 11% YoY improve, with its subsidiary, Empower, crossing $1 billion in base earnings.

At the same time as macroeconomic uncertainties proceed to hang-out many companies globally, Nice West attributed this robust earnings progress to beneficial financial circumstances. For instance, increased common fairness markets led to a rise in its price revenue, and better rates of interest boosted earnings on surplus.

Dividend improve and powerful return on fairness

In a transfer that may please traders looking for passive revenue from their inventory investments, Nice-West Lifeco has introduced a 7% improve in its dividend, reflecting its robust monetary well being and dedication to returning worth to shareholders.

This dividend improve is clearly supported by its spectacular monetary progress, together with a base return on fairness (ROE) of 16% over two years and a base earnings common dividend payout ratio of 56% over 5 years. Such robust efficiency indicators replicate not solely the Canadian monetary providers firm’s increasing profitability but additionally its strong monetary administration.

Curiously, Nice-West Lifeco has raised its dividends by round 36% within the 5 years between 2018 and 2023.

Concentrate on strategic repositioning for future progress

Whereas an organization might have posted robust monetary progress prior to now, it doesn’t essentially imply it’ll proceed to take action sooner or later with out taking note of its key progress drivers.

Nice-West Lifeco has been specializing in strategic repositioning for future progress by increasing its world presence, diversifying its product portfolio, and investing in digital transformation. For instance, the latest sale of Putnam Investments aimed to boost its strategic partnerships with best-in-class asset managers. Equally, the profitable integration of Prudential’s full-service retirement providers enterprise has helped Nice-West obtain pre-tax run-rate value synergies of US$80 million to this point.

Furthermore, the acquisition of Funding Planning Counsel and Worth Companions by its subsidiary Canada Life is prone to make Nice-West extra engaging to advisors and purchasers.

Silly backside line

Given these achievements and progress initiatives, I wouldn’t be stunned if Nice-West Lifeco inventory continues its upward journey within the years to return, making it look engaging to purchase now, particularly in case you’re in search of a basically robust, dividend-paying inventory from the monetary sector.