Beat the TSX? This Dividend Stock Has Actually Done It

Not all stocks can beat the TSX, but here’s one company that has, and holds massive long-term potential for growth and income-seekers alike.

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There’s no shortage of great stocks to add to your portfolio. Some of those great stocks even have the distinction of saying that they beat the TSX.

Here’s a look at one stock that has beat the TSX

Toronto-based Manulife Financial (TSX:MFC) is an intriguing stock that should be on the radar of investors everywhere. Manulife is the largest insurer in Canada and one of the largest insurers on the planet. In total, the company manages over $1.2 trillion in funds.

Manulife provides a bevy of financial services to its customers, which in addition to insurance includes banking, wealth management, and other financial services.

In terms of performance, as of the time of writing, MFS stock trades at just over $26. Year to date, the stock has beaten the TSX, with an 8% gain. Looking out over the trailing 12-month period, those gains extend to an impressive 15%.

Growth is coming from multiple markets

As the largest insurer in Canada, Manulife has turned to international markets in recent years to fuel its growth. More specifically, the financial solutions provider has turned to Asia, and that is where a significant opportunity is unfolding.

In short, Manulife established exclusive agreements with financial institutions in markets across Asia. This allowed the company to quickly grow throughout the region, where there is a growing demand for the financial products that Manulife offers.

That strong growth spills over into Manulife’s financials during earnings season. By way of example, in the most recent quarter, Manulife reported net income of $1 billion, reflecting a $0.9 billion increase over the same period last year. Manulife’s Asia business witnessed 26% growth during that period, fueled by a strong recovery.

Another reason to love Manulife

Apart from its stellar growth potential, another reason why investors continue to flock to MFS stock is the dividend that the company offers.

As of the time of writing, Manulife offers investors a tasty 5.57% yield, making it one of the better-paying dividends on the market. This means that investors who purchase $35,000 worth of Manulife (as part of a larger well-diversified portfolio) can expect to generate an income of over $1,900.

Furthermore, prospective investors should note that Manulife has provided a healthy annual bump to that dividend for nearly a decade without fail, averaging 10% over that period.

In other words, investors who are not ready to draw on that income can reinvest it and watch it grow.

Manulife beat the TSX. Now add it to your portfolio

No stock, even the most defensive is not without some risk. Fortunately, in the case of Manulife, the company is well-diversified across multiple international markets and has a stable, mature market in Canada.

In my opinion, this leading insurer is a great investment that should be a core holding of any well-diversified portfolio.

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 positions in Manulife Financial. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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