Beyond Canadian Bank Stocks: 3 Insurance Plays With Nice Dividends

Banks are great, but these three insurance stocks offer huge dividends, more diversification, and growth exposure.

Canadians love their banks. Whether it’s for dividends or long-term growth, they certainly cannot get enough of them. That is, unless it is during an economic downturn. Which is why even if we’re out of the woods in the near future, it can be a good idea to diversify.

Hence why today we’re talking about insurance stocks. These companies usually provide higher dividend yields, with a focus on long-term growth as well as more diversification in the financial sector. So let’s look at three you may want to consider on the TSX today.

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Manulife

Manulife Financial (TSX: MFC) is a leading international financial services group that provides insurance, wealth management, and asset management products and services. This is both on an individual as well as institutional level. What’s more, they provide global diversification with exposure from Asia to North America.

The company has a long history of paying and increasing dividends, with increases to the dividend over the last decade. So if you’re looking for reliable income, it can certainly be one to consider. It’s also a financially stable company, so those dividends certainly look safe for the foreseeable future.

What’s more, MFC has a focus on innovation. The company is constantly developing new products and services to meet the needs of its customers. So with a 4.98% dividend yield and shares up 25% in the last year, it looks like a strong purchase.

Sun Life

Another company to consider is Sun Life Financial (TSX: SLF). It’s yet another insurance company in Canada, and again offers a global presence. The company operates in three business segments: wealth management providing investment funds, retirement products, and financial planning. Insurance provides a wide range of products from life to group benefits, while asset management looks after funds for individuals and institutions.

The company is also a strong dividend player, boasting a history of reliable increases for years. It operates across North America and Asia, for more diversification, and remains financially sound. SLF focuses on growth, constantly innovating and expanding its product offering to lead to more share growth.

SLF stock currently offers a similar 4.21% dividend yield, with shares trading at 14 times earnings. This is slightly higher than the 12.3 times earnings of MFC stock. Shares are currently up about 18% in the last year as of writing.

Great-West Lifeco

Finally, we have Great-West Lifeco (TSX: GWO). This company is the parent company of a number of insurance and wealth management subsidiaries, from Canada Life to Pacific Life. This alone offers key diversification, with a range of insurance and investment products.

The company has a long history of dividend payments, increasing the payouts substantially and consistently over time. What’s more, GWO stock has a well-established record of being a large and financially stable company. In fact, it’s been able to increase dividends even during economic downturns.

This comes down to the diversified business model, with exposure to different industries as well as countries. However, the stability comes also with lower growth potential, and interest rates could hurt investment returns. Yet over all, it’s been a strong performer for those wanting less risk. And with a higher 5.18% dividend yield and trading at 14.5 while up 20% in the last year, it could be worth considering.

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.

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