Anyone who is planning to build a nest egg has to focus on the two aspects of a stock. What are its growth prospects? And, does it pay a regular dividend?
Growth prospects are essential because you want to ensure that the company’s business model will keep pace with the changing tech. A dividend payout is essential because when you retire, you want to be assured of income irrespective of the fluctuating stock market.
Sun Life Financial (TSX: SLF)(NYSE) ticks both boxes for the discerning investor. It’s a leading insurance player that also focuses on financial services like investments, advice and wealth management.
Good Q3 numbers
Sun Life’s reported net income was $681 million in the third quarter of 2019, an increase of $114 million or 20% compared to the same period in 2018.
Canada’s reported net income was $223 million in the third quarter of 2019, a decrease of $112 million compared to 2018, reflecting unfavourable market-related impacts.
The U.S. market reported a net loss of $186 million in the third quarter of 2019, an improvement of $81 million compared to the same period in 2018.
While North America’s results weren’t great, Asia made up for the shortfall. Asia’s reported net income was $170 million in the third quarter of 2019, an increase of $6 million, or 4% compared to the same period in 2018.
Asia insurance sales were $297 million in the third quarter of 2019, an increase of $95 million or 47% compared to 2018, driven by strong growth in most local insurance markets.
Sun Life has established its presence in China, Vietnam, Philippines, India, Malaysia, and Indonesia, either through partnerships or via subsidiaries.
Asia wealth sales were $2.6 billion in the third quarter of 2019, an increase of $645 million, or 33% compared to 2018, which was primarily driven by money market sales in the Philippines and growth in the pension business in Hong Kong.
Agency sales in Asia were up by 35% compared to the same period last year, driven by strong recruiting activities in the Philippines and China and an enriched product suite in Hong Kong.
Sun Life more than doubled high net worth sales in this region. Strong sales in Asia resulted in solid Q2 results as well for the company.
Dean Connor, President, and CEO, Sun Life knows where future growth for Sun Life is going to come from, “We are pleased with the growth in insurance sales, led by Asia, our fastest-growing pillar, and growth in asset management sales, where we are meeting our Clients’ needs for active fund managers with strong long-term performance as well as investment solutions in alternative asset classes.”
Countries such as India are largely uninsured. Insurance penetration in the country is just 3.69% according to a report by IRDAI (Insurance Regulatory and Development Authority of India).
In a country of 1.3 billion people, there’s tremendous scope to grow. As the middle class in the rest of Asia expands, demand for wealth management and other financial services products will only increase.
Apart from all the growth potential in the stock, Sun Life also pays out a solid 3.65% dividend yield. It’s a good stock to hold right now, both for its growth potential and its steady dividend.
