Manulife Financial (TSX:MFC) stock sits below its 52-week high of $46.42, and for long-term investors, that gap could be worth exploring. The insurer and asset manager has been steadily building momentum, and its latest results suggest the fundamentals are still strong, even if the share price hasn’t fully reflected that yet. So, should investors get in before it climbs back up?
What happened
Over the past year, the dividend stock gained roughly 21%, supported by a mix of solid earnings and shareholder-friendly moves like buybacks. In the second quarter of 2025, Manulife reported net income of $1.8 billion, up an impressive 72% from a year earlier. That jump was largely thanks to stronger market performance, higher-than-expected returns on public equities, and derivative gains.
Core earnings, which strip out certain market impacts, landed at $1.7 billion, down 2% on a constant currency basis. That dip was driven by weaker performance in the U.S. business, offsetting strength in Asia, Canada, and Global Wealth and Asset Management. Still, core earnings per share (EPS) increased 2% to $0.95, and return on equity held steady at a healthy 15%.
More to come
Manulife’s growth engine is firmly tied to its highest-potential segments. Asia delivered a standout performance, with core earnings climbing 13% on the back of robust insurance sales. Annualized premium equivalent (APE) sales jumped 31%, while new business value rose 28%. In Canada, core earnings were up 4% as group insurance growth and higher investment spreads made up for weaker life insurance sales. That division benefited from higher net fee income, improved market conditions over the past year, and $900 million in net inflows, pushing its core earnings before interest, taxes, depreciation and amortization (EBITDA) margin up to 30.1%.
For income investors, the stock’s forward dividend yield of roughly 4.3% is hard to ignore. The payout ratio sits just over 54%, leaving room for increases if earnings keep pace. Since the start of the year, Manulife has repurchased $1.1 billion in shares, part of a capital return strategy that has retired significant stock while maintaining flexibility for growth investments. And right now, a $7,000 investment could bring in dividends of around $300 annually!
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| MFC | $41.21 | 169 | $1.76 | $297.44 | Quarterly | $6,965.49 |
Looking ahead
There are also notable growth catalysts ahead. The company’s planned acquisition of a 75% stake in Comvest Credit Partners, expected to close in the fourth quarter of 2025, will add approximately US$14.7 billion in assets to its Global WAM platform and expand its private credit capabilities. This move taps into a high-demand asset class, potentially boosting fee income and diversifying investment offerings. Meanwhile, Manulife is embedding artificial intelligence (AI) across its operations, launching tools that enhance sales, customer sentiment analysis, and claims automation. These investments aim to increase efficiency, improve customer experience, and ultimately strengthen client retention.
The biggest near-term challenge lies in the U.S. segment, which saw a 53% drop in core earnings this quarter. That was due to unfavourable life insurance claims, lower investment spreads, and higher credit provisions. While this segment represents a smaller share of total earnings than Asia or Global WAM, volatility here can weigh on results. Broader macroeconomic risks, such as interest rate changes, equity market swings, and global growth uncertainty also remain factors to watch.
Botton ine
From a valuation perspective, the market still appears cautious. At roughly $41 per share, Manulife trades at a forward price-to-earnings (P/E) ratio just above 10. That’s well below the broader market average and cheaper than many global insurance peers, despite its diversified earnings, strong capital position, and expanding global footprint. For value investors, that discount could be an opportunity, especially if management continues to deliver steady earnings growth and maintain disciplined capital returns.
Investors willing to ride out short-term fluctuations, buying while the dividend stock is still below its recent highs could pay off. With a mix of defensive income and exposure to faster-growing markets, Manulife offers a rare blend of stability and upside potential in today’s market. If you’re looking for a long-term hold that can deliver both steady cash flow and gradual capital appreciation, this might be the moment to take a closer look.
