Valued at a market cap of $79 billion, Manulife (TSX:MFC) is among the largest financial services companies in the world. Manulife Financial provides diversified financial services across North America and Asia through three main segments:
- Wealth and Asset Management offers investment solutions and retirement planning.
- Insurance and Annuity Products, including life insurance and long-term care.
- Corporate operations encompass reinsurance, timberland management, and integrated banking services through multiple distribution channels.
In the last 10 years, Manulife stock has returned 114% to shareholders. After adjusting for dividend reinvestments, cumulative returns are closer to 236%. Since November 2015, the TSX index has returned “just” over 200% to shareholders.
Despite these market-beating returns, Manulife stock offers you a tasty dividend yield of 4% today. Let’s see if the blue-chip TSX dividend stock is still a good buy.
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Is Manulife stock a good stock to own today?
Manulife Financial delivered a strong third quarter with record core earnings. Moreover, it demonstrated clear momentum toward its 2027 financial targets despite facing some operational headwinds.
The Canadian insurer posted core earnings per share growth of 16% year over year, supported by robust underlying business performance across Asia, Global Wealth and Asset Management, and Canada. Core return on equity (RoE) reached 18.1% in the third quarter (Q3), which is in line with the 18% plus target by 2027.
The company’s highest-potential businesses in Asia and Global Wealth and Asset Management accounted for 76% of core earnings year to date, exceeding the 2025 target of 75%. Asia delivered exceptional performance with core earnings surging 29% year over year to record levels while maintaining a resilient new business value margin of 39%.
Global Wealth and Asset Management achieved its eighth consecutive quarter of double-digit pre-tax growth, expanding core EBITDA (earnings before interest, tax, depreciation, and amortization) margin by 310 basis points to 30.9% through disciplined expense management despite facing net outflows of $6.2 billion driven by pressure in North American retail channels and anticipated retirement business headwinds.
Insurance new business performance remained strong across all segments, with total contractual service margin for new business increasing 25% year over year. It was the fifth consecutive quarter of growth exceeding 20% for the segment.
This metric provides clear visibility into future earnings potential and demonstrates the strength of Manulife’s diversified franchise. The company completed its comprehensive triennial review of the U.S. long-term care business, with results validating the prudence of reserves through a net favourable impact, including a $1.1 billion increase in contractual service margin.
Manulife unveiled a refreshed enterprise strategy anchored in the ambition to become the number one choice for customers while maintaining focus on diversified growth.
It recently announced an exciting agreement with Mahindra to form a joint venture entering the Indian insurance market, subject to regulatory approvals, expected to require capital injections of roughly $400 million over the next decade.
Management maintained confidence in delivering approximately $6 billion in remittances for 2025, tracking well toward the cumulative 2027 target of at least $22 billion. The balance sheet remained robust, with a LICAT (life insurance capital adequacy test) ratio of 138%, providing a $26 billion buffer above supervisory targets, while financial leverage improved to 22.7%.
Manulife is well-positioned to continue investing in organic growth and returning capital to shareholders.
Is this TSX dividend stock still undervalued?
Analysts tracking Manulife stock forecast adjusted earnings to grow from $3.87 per share in 2024 to $5.51 per share in 2029. In this period, the annual dividend per share is projected to increase from $1.60 to $2.14.
If Manulife stock is priced at 10 times forward earnings, which is reasonable, given its growth estimates, it should trade around $55 in late 2028, indicating an upside potential of 18% from current levels. If we adjust for dividends, cumulative returns could be closer to 30%.
