Life insurance ensures there is money for heirs who rely on the policyholder’s earnings for sustenance. However, if you’re not after a death benefit, it is possible to generate a lifetime of earnings from stocks. Canadians looking for a financial life insurance policy have plenty of choices on the Toronto Stock Exchange.
Coincidentally, a life insurer that has transformed into a global financial services company is among the top picks for long-term investors. Manulife Financial (TSX:MFC) was incorporated in 1887. Today, it provides insurance, wealth management, and financial services in Canada, Asia, Europe, and the United States (John Hancock brand).
At $41.74 per share, the dividend yield is 4.04% while the payout frequency is quarterly. MFC is not immune to market headwinds and economic downturns, but it has weathered them and emerged stronger every time. Read on to know why this large-cap stock is a buy-and-hold investment.
A dividend investor’s dream
Manulife is more than a household name. Besides its weighty $71.5 billion market capitalization, the stock is a dividend investor’s dream. MFC has raised dividends for 11 consecutive years. The most recent board-approved dividend hike was 10%. Notably, the dividend-growth pace over the past five years is a compound annual growth rate (CAGR) of 8.8%. MFC’s overall return in five years is +191.8% (23.86% CAGR).
For illustration purposes, a $50,000 investment in July 2025 will compound to $111,717 (123.43% overall growth) in 20 years, including dividend reinvestment. The example does not include price appreciation within the period. Assuming the yield remains constant, you’d start receiving $1,128.34 every quarter after July 2045.
Quarterly results
In the first quarter (Q1) of 2025 (three months ending March 31, 2025), net income attributable to shareholders declined 47% year over year to $485 million, although core earnings remained stable at $1.77 billion. Its chief financial officer, Colin Simpson, assured that MFC is well-positioned to navigate the current economic conditions and capitalize on growth opportunities. The strategic priorities and a robust balance sheet are the anchors.
Roy Gori, on his last conference call after eight years as MFC president and CEO, said, “We started the year with continued strong momentum, delivering record levels of insurance new business results this quarter. We generated double-digit growth in new business value across all insurance segments, led by Asia with a 43% increase year over year.” Phil Witherington took over Gori’s position effective May 8, 2025.
Other business highlights include the substantial 50% year-over-year increase in APE (annual premium equivalent) sales to $2.7 billion in Asia. There was high demand in Hong Kong, Singapore, and Mainland China. New Business Value and Contractual Service Margin grew 36% and 31%, respectively (both to $907 million).
Great strength
“The work we have done since 2017 has put the company in a position of great strength.” According to Witherington, the current sales run rate is promising, notwithstanding the macroeconomic uncertainty. He remains cautiously optimistic about the outlook. Asia is undoubtedly the growth engine in the years to come.
Manulife’s strong financial performance, global reach, and diversified business make it a solid source of pension-like income. The history of increasing dividends is the second compelling reason to buy the financial stock and own it forever.
