Manulife Financial (TSX:MFC) has long been a staple in Canada’s financial sector, offering a mix of insurance and wealth management services. As of writing, its stock was trading at about $42. This puts the stock just below its 52-week high of $46.42, thus making investors wonder whether this is the right time to buy or if there’s still room for growth.
The numbers
In its most recent earnings report, Manulife stock posted strong results. For the fourth quarter of 2024, the company reported core earnings of $1.9 billion, thereby marking a 6% increase from the same quarter a year prior. Over the full year, core earnings reached $7.2 billion, up 8% from the previous year. The strong performance was driven by its Asia segment, as well as solid results from Global Wealth and Asset Management. These together accounted for 70% of its earnings.
One of the most attractive aspects of Manulife stock is its commitment to returning capital to shareholders. In February 2025, the company announced a 10% increase in its quarterly dividend, a move that reflects its strong financial standing. Currently, the dividend yield sits at approximately 4.2%, thus making Manulife an appealing option for income-focused investors looking for reliable passive income.
Over the past year, Manulife’s stock has been a solid performer, fluctuating between a low of $31.24 and a high of $46.42. This performance highlights the company’s resilience amid changing market conditions. Manulife stock has steadily climbed, reflecting confidence in its long-term growth prospects and strong financial foundation.
Future outlook
Looking ahead, analysts remain optimistic about Manulife stock’s future. Earnings and revenue are projected to grow at an annual rate of 9.2% and 16.7%, respectively. The company’s earnings per share (EPS) are expected to rise by nearly 20% per year, with an anticipated return on equity of 13.4% over the next three years. With a strong balance sheet and strategic investments in high-growth areas like Asia, Manulife stock is positioned to maintain its upward trajectory.
The company’s valuation also suggests that there could still be room for growth. Manulife stock’s trailing price-to-earnings (P/E) ratio is 14.9, while its forward P/E ratio is 10.1, thus indicating that it remains reasonably priced relative to its earnings potential. Furthermore, the price-to-book (P/B) ratio of 1.6 suggests that the stock is trading at a modest premium to its book value. This is common for financial stocks with strong profitability.
Positive sentiment suggests that Manulife stock remains a strong option for investors looking for stability and long-term gains. Yet despite its strengths, investors should still consider broader market conditions. Financial stocks are sensitive to interest rate changes and economic cycles, which could impact Manulife’s performance. However, the company’s diversified operations and strong capital position help mitigate some of these risks, thus making it more resilient in turbulent market conditions.
Foolish takeaway
Manulife stock’s combination of dividend growth, steady earnings, and a solid financial foundation make it an attractive choice for long-term investors. While it’s currently trading near its 52-week high, its valuation metrics and growth prospects suggest that there could still be upside potential. For those looking for a mix of income and growth, Manulife stock presents a compelling opportunity.
