3 Reasons Why Manulife Financial Corp. Is on My Watch List

Solid results, aggressive expansion, and a great dividend make Manulife Financial Corp. (TSX:MFC)(NYSE:MFC) a great opportunity for an investment.

| More on:
The Motley Fool

The insurance industry is a crowded one for the current crop of companies. Manulife Financial Corp. (TSX:MFC)(NYSE:MFC) is the largest insurer in the country and is constantly looking for new revenue sources to expand into.

Here are the top three things I like about Manulife and why I’m adding it to my watch list of companies.

1. Aggressive expansion

With Manulife already serving one in five Canadians, and the insurance market in Canada somewhat saturated, there are two avenues for expansion: acquisition of another player or international expansion.

Manulife has done both of these things, and in recent memory, too. A little over a year ago the company acquired Standard Life PLC in a whopping $4 billion deal, which added 1.4 million customers to Manulife. That deal was significant because it allowed gaps in one company’s portfolio to be filled in by the other.

On the international front, Manulife has acquired and signed a number of agreements that increase the company’s presence, particularly in Asia. Manulife purchased Standard Chartered’s Hong Kong pension business, and just this past April Manulife forged a 15-year partnership with Singapore-based DBS Holdings Ltd.

With a massive middle-class that is constantly growing amid an aging population, the expansion initiatives in Asia could spell a doubling of wealth in the region over the next decade.

2. Strong results

Manulife’s recent quarterly report showed signs of improvement over the same quarter last year. Core earnings in the Asia division were up by approximately 30% to $356 million. The Canadian and U.S. divisions also reported increases of 39.1% and 14.9%, respectively. Total assets under management administration reached $887.98 billion, an increase of 34%.

Looking at the first three quarters of this year in comparison to last year, the results show just how financially strong Manulife is at the moment. Core earnings for the company were up by an impressive 18.1% to $2.57 billion, and diluted core earnings per share increased by 13.5% to $1.26.

These growth numbers alone show why Manulife is a great option for any portfolio.

3. Value and dividends

Manulife has a quarterly dividend of $0.17 per share for a yield of 3.33%. The company has raised the dividend for the past two years and is likely to continue to do so next year as well.

Manulife currently trades at just over $20. The company has, like most of the market, taken a beating of late, which has made the stock incredibly inexpensive for something of such great value.

In the past six months, the stock is down by nearly 14%, but extending this out to a full five-years for the benefit of long-term investors, the stock shows a healthy increase of 20%.

In my opinion, Manulife is a great option for investors seeking long-term growth.

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 Demetris Afxentiou has no position in any stocks mentioned.

More on Bank Stocks

A close up image of Canadian $20 Dollar bills
Bank Stocks

1 Top Bank Stock for Investors Looking to Boost Their Passive Income in 2022

The goal to growing one’s passive income over time is a noble one. For those entering retirement or nearing those …

Read more »

stocks rising
Bank Stocks

Big 6 Bank Stocks Could Soar With Interest Rate Hikes

After the last year’s dividend bonanza, significant capital gains could be next for Big 6 Bank stock investors in 2022. …

Read more »

Bank Stocks

My Best Value Pick to Buy Amid the Market Plunge

Market plunges can be scary, especially if we’ve gone without one for quite some time. Many beginners have likely never …

Read more »

money while you sleep
Dividend Stocks

Value vs. Return Potential: 3 Stocks for the Right Balance

Getting the most “bang for your buck” is a healthy approach to spending and investing. For investing, it’s tied to …

Read more »

Stand out from the crowd
Bank Stocks

My Top Canadian Bank Stock to Buy for Dividend Growth

One of the Big Five banks, Bank of Nova Scotia (TSX:BNS)(NYSE:BNS), is a top choice for TSX investors due to its reliable …

Read more »

edit Four girl friends withdrawing money from credit card at ATM
Bank Stocks

2 Top Canadian Bank Stocks to Buy Right Now

For those looking to invest like Warren Buffett or other top-tier value investors, bank stocks are a great way to …

Read more »

consider the options
Bank Stocks

Interest Rate 2022: 8 Hikes Needed to Cool Inflation

The guessing game is on regarding the timing of the first interest rate hike by the Bank of Canada (BoC) …

Read more »

Bank Stocks

Will TD Bank Stock Keep Outperforming in 2022?

Toronto-Dominion Bank (TSX:TD)(NYSE:TD) delivered a solid performance in 2021. Up 35% for the year, it easily beat the S&P 500, …

Read more »