Manulife Financial (TSX:MFC) just released its first-quarter 2025 results, and while the numbers aren’t universally glowing, these were far from disappointing. In fact, there are signs of strength that long-term investors may want to pay attention to, especially those looking for a dividend stock that offers both stability and income. The company continues to evolve, with strong momentum in Asia, continued buybacks, and a healthy dividend yield that makes it hard to ignore. So let’s look at this valuable stock.
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Into earnings
Let’s start with the headline numbers. Manulife reported $1.8 billion in core earnings, which was down a modest 1% on a constant currency basis compared to the same quarter last year. That might not seem impressive at first glance, but earnings per share still rose 3% to $0.99, thanks to ongoing share repurchases and strong operational execution. The drop in overall net income, which came in at $485 million (or $0.25 per share), was driven by a few one-time issues – namely, a $700 million hit from a reinsurance transaction and some underwhelming returns from private investments. While that may spook some investors, these items don’t signal any fundamental weakness in the business.
If you’re looking for growth, the real story this quarter was in Manulife’s global insurance operations, particularly in Asia. The insurer’s Annualized Premium Equivalent (APE) sales jumped 37% year over year, while new business value climbed 36%. Even more impressive: in Asia, APE sales surged 50%, and new business value rose 43%. The company continues to benefit from partnerships in key growth markets like the Philippines, where it just extended its deal with China Bank by 15 years. This is a significant edge over competitors focused mainly on more saturated North American markets.
More to come
North America didn’t stand still either. In the U.S., APE sales were up 29% thanks to increased demand for both life insurance and long-term care products. Canada was more subdued, with a 2% drop in APE sales, though this was mainly due to the timing of group insurance renewals. On the wealth and asset management side, Manulife saw core earnings rise 24% as it continued expanding its retirement solutions offerings. These include digital tools like FutureStep in the U.S. and its first pension fund in China. However, net inflows dropped sharply to just $500 million, a significant drop from $6.7 billion last year. Still, the dividend stock managed to maintain positive inflows in a tricky environment.
Manulife’s strong capital position is another reason why some investors keep holding on, even during turbulent quarters. The dividend stock’s Life Insurance Capital Adequacy Test (LICAT) ratio stood at 137%, giving it a cushion well above the regulatory minimum. Its leverage ratio came in at 23.9%, keeping it comfortably below the 25% level often viewed as the ceiling for financial discipline. Book value per share is up 12% year over year, which points to real shareholder value growth. And while many companies are slowing down or suspending buybacks, Manulife continued to repurchase shares during the quarter – $300 million worth, to be exact.
Value right now
Then there’s the dividend. Manulife pays a quarterly dividend of $0.44 per share, translating into a yield of 4.2% at writing. That’s well above the average yield you’ll find on the TSX these days. It’s also backed by a solid payout ratio and strong underlying earnings. For income-focused investors, that kind of stability is hard to come by, especially from a company with international growth prospects. And right now, a $50,000 investment could bring in $2,100 in annual income!
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| MFC | $41.89 | 1,194 | $1.76 | $2,101.44 | Quarterly | $49,994.66 |
Still, no stock is without risk. Manulife’s exposure to market volatility through its investment portfolio can hurt earnings in tough quarters, just like it did this time around. There’s also pressure on the U.S. business from regulatory and competitive forces. But the broader picture remains intact: this is a company executing on its long-term plan, streamlining operations, boosting digital offerings, and expanding its footprint in high-growth regions.
