Manulife Stock Jumps on Strong Global Performance

MFC (TSX:MFC) stock reported strong earnings, growth in Asia, and even more to come. But it’s the dividend increase that had my attention.

| More on:
grow dividends

Image source: Getty Images

Manulife Financial (TSX:MFC) is going more global, a lot sooner than predicted.

MFC stock saw shares jump 7% after earnings came out, reporting that the company saw incredibly strong performance in Asia. What’s more, it’s now extending its goals in Asia by another two years.

What happened?

It was an overall strong quarter for MFC stock. Canada’s largest insurer beat analyst estimates for core earnings, with strong performance both in Canada and Asia leading the charge. The company saw its Asia business in particular rise as mainland Chinese visitors have been heading to Hong Kong after pandemic restrictions were lifted.

There were some strong results in profitability, with a 11% rise in annual premium equivalent (APE) in Asia, and 44% in Canada. But the growth doesn’t look to be done yet, with MFC stock stating it’s also rejigging its portfolio to focus on more profitable areas. This included a $10 billion reinsurance deal last year.

For the quarter, the stock reported core earnings of $1.77 billion or $0.92 per share, compared to $1.54 billion and $0.77 the year before. Furthermore, MFC stock announced it would be increasing its dividend by 9.6%!

More to come

Not only is MFC stock happy with the growth in Asia, it wants more of it. In fact, the company set out an earnings target of accounting for half of core earnings by 2025. In that two years, it would mean increasing from 23% in 2023.

It’s an extension that came along after Asia, and China in particular, continued to see pandemic restrictions weigh on the country. Now, with restrictions finally lifted, it looks as though that goal could finally be reached.

MFC stock currently operates in 13 markets in Asia, and about 13 million customers. And as mentioned, with more visitors to Hong Kong, there has been a resurgence of even more opportunities. And while this is all exciting, there is, of course, one area where investors were likely quite focused.

More dividends!

The big heavy hitter isn’t just more growth in Asia — there’s also more dividends! Manulife stock announced a rise of 9.6% as mentioned. With growth to come and dividends on deck, it’s clear why investors flooded the stock after earnings.

Shares jumped by about 7% on Thursday after earnings were reported. This added to the company’s already strong track record, with shares up 13% in the last year. And yet, MFC stock remains a steal on the TSX today.

Investors can pick up the stock trading at just 4.38 times earnings, and 1.97 times sales. So, despite all this growth, there is still more than enough reason to pick up the stock. And with more travel coming down the line for China and other Asian countries, it’s likely that the growth in shares and dividends is here to stay.

Bottom line

Canadian insurers have had a hard time finding ways to grow besides offering more insurance options. Yet MFC stock has been a leader in finding those opportunities in emerging markets and beyond. Asia has been one of these success stories, and there could be even more on the way as the company seeks out growth opportunities.

So, is MFC stock a buy on earnings? Absolutely — especially for long-term shareholders looking for more dividends.

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 Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Dollar symbol and Canadian flag on keyboard
Dividend Stocks

3 of the Best Canadian Stocks I’d Buy and Hold Forever

These three stocks have always done well for me and should continue well into the future -- especially with dividends…

Read more »

edit Taxes CRA
Dividend Stocks

Tax Refund: How to Get More Money Back This Year

Resourceful taxpayers will try to find out available tax credits and tax refunds to get their money back in this…

Read more »

protect, safe, trust
Dividend Stocks

How to Build a Bulletproof Monthly Passive Income Portfolio With Just $10,000

The market turned bearish on dividend stocks. Now is the time to buy them at their dip and bulletproof your…

Read more »

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Dividend Stocks

1 Hidden Catalyst That Could Ignite BCE Stock

BCE (TSX:BCE) stock has been cutting and cutting some more, but it needs to add to its already strong arsenal…

Read more »

Retirement
Dividend Stocks

Got $5,000? Buy and Hold These 3 Value Stocks for Years

Given their healthy growth prospects and attractive valuations, these three stocks offer attractive buying opportunities.

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

Should You Take CPP at 65 or 70? Here’s What Research Says

If you take CPP at age 70, you may supplement your income with dividend stocks like Brookfield Asset Management (TSX:BAM)…

Read more »

Increasing yield
Dividend Stocks

Boost Your Passive Income With These 3 High-Yielding Dividend Stocks

These three high-yielding dividend stocks could boost your passive income.

Read more »

calculate and analyze stock
Dividend Stocks

TFSA Investors: 2 TSX Dividend Stocks to Buy Today

These two dividend stocks have increased their dividends annually for more than two decades.

Read more »