The Motley Fool

3 Reasons to Buy Sun Life Financial Inc. Today

Sun Life Financial Inc. (TSX:SLF)(NYSE:SLF) has nearly doubled in the past three years, but the rally might still have some legs.

Here are the reasons why I think investors should consider putting the company in their portfolios.

1. North American strength

Sun Life just reported better-than-expected Q1 2015 earnings. Net income for the first three months of the year hit $441 million, a 10% increase over the same period in 2014.

The Canadian business continues to be supported by Sun Life’s strong position in the group retirement benefits area. One deal that investors should focus on is a new $5 billion longevity insurance agreement with Bell Canada.

As retirees live longer, more companies with large defined pension programs are looking for ways to de-risk the obligations. The deal with Bell shows that Sun Life is a major player in this market.

Sun Life also saw a huge boost to assets under management (AUM). In fact, global AUM jumped $813 billion in the first quarter, a 20% increase over the same period in 2014.

The growth was partly driven by a stronger U.S. dollar, as well as continued gains at MFS, the company’s U.S.-based global asset management business. AUM at MFS rose to US$441 billion from $421 billion in Q1 2014.

2. International opportunities

Sun Life has invested heavily in building its Asian operations. Net income from the region hit $68 million in the first quarter, more than double the $32 million earned in the same period a year ago.

Total individual insurance sales in Asia increased by 28% with strong gains in the Philippines, Indonesia, and Hong Kong.

One country investors should watch is India. A recent decision by the Indian government to increase foreign ownership limits in local insurance partnerships means Sun Life has an opportunity to really expand its presence.

In March a bill passed that will allow Sun Life and other foreign players to bump their ownership stakes from 26% to 49%. Sun Life has been building its Indian partnership, Birla Sun Life, for 15 years. The company is among the top six private insurers in the country. One estimate puts the current size of the sector at $60 billion with the potential to grow to $240 billion in the next decade.

3. Dividend growth

Sun Life just increased its dividend by 6%. Investors were spared a nasty cut during the financial crisis, but the company has waited a long time to begin moving the distribution higher. Investors should see the payout rise on a regular basis now that income levels are improving.

Sun Life pays a dividend of $1.52 that yields about 3.8%.

Should you buy?

Sun Life is a great way to invest in Asian growth. The company also provides investors with a way to play the Canadian financial sector without taking on the big retail mortgage exposure you get with some of the banks.

Just Released! 5 Stocks Under $49 (FREE REPORT)

Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $49 a share.
Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune.
Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.

Claim your FREE 5-stock report now!

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Andrew Walker has no position in any stocks mentioned.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.