Manulife Financial (TSX:MFC) is a well-known Canadian insurer and financial services provider. The company operates in core markets such as Insurance and Annuity Products, Corporate and Wealth, Asset Management Businesses, and others.
Now, apart from its domestic Canadian market, Manulife has a strong market position in the U.S. and Asia. Moreover, Manulife is increasingly expanding globally, in a bid to scale its business. This global expansion is an often overlooked catalyst I think long-term investors should be paying closer attention to.
Here’s are some of the key moves Manulife is making and why they matter.
Manulife plans to acquire a controlling interest in Serverfarm
One of the more intriguing recent moves Manulife has made over the past month is a deal to acquire eight data centres spread across Europe, North America, and Israel.
This definitive agreement to gain a controlling interest in Serverfarm was announced in mid-May. Manulife will gain eight data centres in key markets such as Los Angeles, Seattle, Chicago, and Atlanta, housing corporate tenants like Amazon, Google, CenturyLink, etc. Thus, this acquisition by Manulife will not only aid its global expansion plans but also help drive growth.
Strong Q1 2023 results under new accounting scheme
Manulife’s most recent earnings results, released this past month, highlight the company’s operational strength across the board. However, there were also new accounting standards the company brought in, which may have contributed slightly to this growth.
Manulife reported a US$100 million increase in its net income compared to last year. The net income attributable to shareholders was $1.4 billion, with diluted earnings per share coming in 4% higher at US$0.73 per share.
The company’s share-buyback program and solid earnings growth led to strong fundamentals-driven performance for the company. On a year-to-date basis, MFC stock is up on the year, which is impressive considering the underperformance of a number of other insurance and financial-related firms in 2023 thus far.
Notably, most of this growth came from outside Canada, with Manulife’s Canadian division reporting relatively flat earnings on a year-over-year basis. Thus, the company’s international expansion plans matter a great deal to long-term investors.
Manulife continues digital transformation by upgrading its technology platform
As per recent reports, Manulife has decided to upgrade its advisor experience, with the help of the Unified Managed Platform from Envestnet. Leo Zerilli, the organization’s Head of Wealth and Asset Management, has said that an enhanced portfolio management system will allow Manulife’s advisors to provide world-class services to the clients.
The new platform leverages advanced technology which helps reduce administrative burden, enhances advisor productivity and improves overall customer experience.
Bottom line
There are a number of international growth strategies underway at Manulife, which have already started to pay dividends (figuratively and literally) for investors. Looking forward, I think the company is about as well positioned for growth as any insurer or financial advisory company in the Canadian market.
