Is Manulife Stock a Good Buy?

Here’s what’s behind Manulife stock’s surge in 2024 and why it could still be a smart buy for your portfolio.

| More on:
3 colorful arrows racing straight up on a black background.

Source: Getty Images

Manulife Financial (TSX:MFC) is continuing to outperform the broader market by a wide margin in 2024. MFC stock currently trades with 51% year-to-date gains compared to the S&P/TSX Composite Index’s 18% advances so far this year. With this, it currently trades at $44.24 per share with a market cap of $78.1 billion. Besides its strong financial growth trends, declining interest rates have also contributed to Manulife stock’s recent outperformance, as lower rates tend to support the profitability of insurance companies.

But with such a strong performance, the big question for investors is whether it’s too late to buy in or if Manulife stock still has room to inch up. In this article, I’ll break down what’s behind Manulife stock’s surge in 2024 and discuss whether it could still be a smart buy for your portfolio.

Manulife stock’s rally in 2024

Despite global macroeconomic uncertainties, Manulife’s financial performance in 2024 has been nothing short of impressive. Last week, the Toronto-based insurance giant reported record adjusted net profit for the third quarter, reaching $1.83 billion, up 8.2% YoY (year over year). This growth was driven by a range of factors, including significant increases in new business and strong global wealth management results, particularly in Asia.

Clearly, one of the key drivers behind Manulife stock’s recent surge is the strong performance of its insurance businesses across Asia, Canada, and the United States. In Asia, where the company has a strong presence, the company saw record sales, with its annual premium equivalent sales up by 64% YoY and new business value advancing by 55% compared to the same quarter last year. In addition to its latest product launches for high-net-worth clients, Manulife’s growth in Asia was primarily fueled by strong demand in markets like Hong Kong, mainland China, and Singapore.

Focus on expansion and digital initiatives

Manulife stock’s solid performance this year could also be a result of its recent strategic focus on digital innovation and expansion into high-growth markets. In Asia, Manulife has been aggressively expanding its product lineup and digital capabilities to better serve its growing customer base. For example, the company recently rolled out a series of digital tools and mobile applications across key markets like Vietnam, Indonesia, and the Philippines. These tools not only make it easier for customers to manage their policies but also streamline premium payments and claim processes, which ultimately leads to customer engagement and satisfaction. In addition, these initiatives could help Manulife capture a larger share of the digitally savvy, younger demographic in these rapidly growing markets.

In the U.S. market, Manulife recently entered a strategic partnership with the tech firm Ethos to streamline the life insurance application process. Through the Ethos platform, Manulife is offering customers simplified access to its Simple Term product.

Is Manulife stock a good buy now?

Although Manulife stock has seen solid gains this year, you may wonder if it still offers upside potential or if it’s already reached a peak. While short-term macroeconomic challenges remain, Manulife’s growth trajectory, strategic initiatives, and strong fundamentals suggest the stock may still have room to run. In addition to its upside potential, Manulife’s stable annualized dividend yield of 3.6% makes it an even more attractive stock for income-focused, long-term investors.

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 Jitendra Parashar 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 Investing

hand stacking money coins
Dividend Stocks

2 Ultra-High-Yield Stocks Canadians Can Buy Aggressively and 1 to Steer Clear of

A high yield is an opportunity to buy the dip and lock in a higher dividend income. But not all…

Read more »

sale discount best price
Investing

2 Bargain Stocks to Buy While They’re Still Cheap

Bank of Montreal (TSX:BMO) stock and another relative bargain are hiding in plain sight this November.

Read more »

coins jump into piggy bank
Dividend Stocks

Invest for Tomorrow: 3 TSX Stocks to Build Lasting Wealth

Stocks can be fun but risky. So, if you want to create long-term wealth, consider these top choices.

Read more »

dividend growth for passive income
Tech Stocks

3 Growth Stocks With Potential Multi-Fold Returns in a Decade

Given the favourable environment and their growth initiatives, these three growth stocks can deliver superior returns in the long run.

Read more »

data analyze research
Stocks for Beginners

These 2 Growth Stocks Could Help You Become a Millionaire

With returns of 647% and 868% over the last 10 years, respectively, these two Canadian growth stocks have already showed…

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Investing

TFSA Investors: Where to Invest $7,000 Before the Year Ends

This unique ETF invests using 1.25 times leverage in Canadian bank stocks.

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

3 Dividend Stocks to Start a TFSA Pension

These stocks have delivered solid long-term total returns.

Read more »

Caution, careful
Investing

3 CRA Red Flags for TFSA Investors

The TFSA is meant for slow and steady growth. So, if you're seeking out octane gains, the CRA is going…

Read more »