1 Incredibly Cheap Canadian Dividend-Growth Stock to Buy Now and Hold for Decades

If you want one dividend-growth stock you can buy, ignore, and still brag about in 2046, you need two things at once: a dividend that rises and a price that still looks reasonable today. A true Canadian dividend-growth stock earns enough to lift its payout without strain, it sits in a sector with durable demand, and raises distributions through different cycles. “Cheap” does not mean broken. It means you pay a modest multiple for steady earnings, you collect a solid yield now, and you give compounding room to work.

GWO

Great-West Lifeco (TSX:GWO) fits that bill as it runs a sturdy business with a wide footprint. It sells life and health insurance, retirement products, and wealth management through brands such as Canada Life, plus large operations in the United States and Europe. Insurance sounds boring, but boring turns into beautiful when it throws off cash year after year. Great-West also benefits from scale, which supports cost control and disciplined pricing.

The last year brought a clear message from management: keep rewarding shareholders while growing the core. In January 2026, it renewed its normal course issuer bid, which lets it buy back up to 20 million shares over the following year. The dividend stock also highlighted the pace of repurchases in 2025, when it bought back about $1.63 billion worth of shares.

Then February 2026 delivered the headline dividend investors love. Great-West announced a 10% increase to its quarterly common dividend, taking it to $0.67 per share, payable at the end of March. That move built on a long pattern of steady increases and signalled confidence in earnings power. It also arrived with a reminder that the balance sheet has breathing room, with holding-company cash of $2.1 billion.

Earnings support

In the fourth quarter of 2025, Great-West posted total base earnings of $1.25 billion, up from $1.12 billion a year earlier. For the full year, it delivered $4.65 billion in base earnings, up from $4.2 billion. Net earnings from continuing operations came in at $1.05 billion for the quarter and $3.96 billion for the year. Those numbers show a business that can grow through mix, markets, and execution.

The drivers looked diversified, which matters for a decades-long hold. In Q4 2025, the U.S. segment produced $440 million in base earnings, while Canada added $400 million, Europe $256 million, and Capital and Risk Solutions $258 million. Management pointed to higher fee and spread income in the U.S. from stronger markets and sales momentum, plus improving insurance experience in Canada. Europe also saw a rebound in U.K. bulk annuity sales, with $1.5 billion in Q4.

Great-West’s forward dividend sits around $2.50 per share, which works out to roughly a 3.85% yield at writing, and the payout ratio sits near 57%. That leaves room for more growth, even if earnings cool off. The dividend stock also trades around an 11 times forward earnings multiple, with a price-to-book near two. Book value per share ended 2025 at $28.07, which gives investors another anchor when markets get loud and jumpy again. Right now, you could therefore get a great deal on a solid dividend, even with $7,000.

COMPANYRECENT PRICENUMBER OF SHARESANNUAL DIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTGWO$63.21110$2.50$275.00Quarterly$6,953.10

Bottom line

The risks deserve a quick, honest nod. A sharp equity-market drop can pressure fee income, and credit stress can hurt insurers fast. Regulatory capital rules can shift, and competition can heat up in wealth and retirement. Still, Great-West has scale, strong capital, and a shareholder-friendly playbook. If you want one incredibly cheap Canadian dividend-growth stock to buy now and hold for decades, Great-West Lifeco looks like the kind of steady machine that can quietly make you wealthier while you get on with your life.

The post 1 Incredibly Cheap Canadian Dividend-Growth Stock to Buy Now and Hold for Decades appeared first on The Motley Fool Canada.

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Fool contributor Amy Legate-Wolfe 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.