Fed's Gradual Hikes Favor Rate-Sensitive Stocks Like Great-West Lifeco

The US Federal Reserve's interest rate debates are back in focus after Minneapolis Fed President Neel Kashkari signaled support for gradual hikes. This shift can change the economics of lending, balance sheet risk, and investor sentiment for large financial stocks.

A curated screener of sizeable financial companies across the US, UK, Canada, Australia, and New Zealand found three stocks that appear positively exposed to this latest policy twist: Great-West Lifeco (TSX:GWO), Sun Life Financial (TSX:SLF), and Equity Bancshares (EQBK).

Great-West Lifeco is a large Canadian financial group with operations in Canada, the US, and Europe. It generates most of its revenue from Canada at about CA$12.4b, followed by Europe at CA$8.6b, Capital and Risk Solutions at CA$5.6b, the United States at CA$6.2b, and Corporate activities at CA$0.4b.

The company's fee-rich retirement engine and 19.3% ROE raise questions about how much of that strength is already reflected in the numbers, and what analyst forecasts could reveal about the next phase of this story.