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Great-West Lifeco Inc. (GWO)
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Sun Life Financial Inc. (SLF)
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Dream Industrial Real Estate Investment Trust (DIR.UN)
Q: Greetings, currently hold Great West and Sunlife well rewarded to date. Thinking of switching Great West for Dream REIt based on your Sept report. Objectively long term does it make sense., thanks Bman
5i Research Answer:
While GWO has seen improving momentum lately, we still think it is one of the weaker insurance names in the Canadian space. GWO has historically not been a higher growth name and we have favoured it for income. Generally speaking, we prefer DIR.UN for its growth upside while it also offers a higher yield at 5.35%. We think with rates coming down, we think DIR.UN stands to benefit more than GWO as it will be able to pursue growth projects more easily while interest expenses will also be lower, improving the bottom line. We think this move makes sense and it also adds diversification with some of the overlap between GWO and SLF.