There are plenty of investment opportunities in the market right now. One of them is an undervalued dividend stock that offers long-term growth potential, a growing dividend, and a business model with defensive appeal.
That undervalued dividend stock is Manulife Financial (TSX:MFC), and here’s why you should consider it now.
Source: Getty Images
Manulife’s business is more than you may think
Manulife is one of Canada’s largest insurers, with a broad business that extends beyond insurance into wealth and asset management. Because of that reach, Manulife has become one of the most recognized financial companies in Canada.
At its core, Manulife collects premiums and fees from its customers. Some of that money is then invested until it is needed to pay claims. That pool of money is known as the float, and investing it gives Manulife another source of income beyond premiums and fees.
Manulife has also grown well beyond the Canadian market. While the natural growth bridge for Manulife is the U.S. market, the company has put a focus on Asia, where Manulife has built a growing presence across several countries.
In Asia, Manulife has historically used partnerships to expand efficiently, and those alliances still matter today. But its strategy has become broader and more mature, with greater emphasis on direct distribution, digital tools, and a wider mix of channels. That gives the company exposure to different markets with different growth profiles.
Just as importantly, Manulife is not dependent on a single revenue stream. Its mix of insurance, wealth, and asset management makes the business more diversified, which can add some defensive strength and help support the dividend over time.
Why Manulife looks undervalued in 2026
One reason Manulife stands out as an undervalued dividend stock is that insurance companies often don’t get much attention from the market. They are slow-moving, unexciting investments, but they produce steady earnings, generate strong cash flow, and build long-term value.
In the case of Manulife, that broad mix of insurance, wealth management, and asset management gives it multiple ways to grow. That makes Manulife look far more attractive as an undervalued dividend stock than what the current valuation suggests.
Manulife also benefits from its scale. Large insurers benefit from spreading costs across a large customer base. That allows them to invest that float more efficiently. In the case of Manulife, that scale is a big advantage.
In short, Manulife boasts a solid business model that has elements of growth and defensive appeal linked to it.
Let’s talk about that dividend
One of the main reasons why investors find Manulife appealing is the company’s quarterly dividend. As of the time of writing, Manulife offers a yield of 3.5%.
The company also has an established history of providing investors with annual bumps to that dividend. Even better, the dividend is supported by Manulife’s diversified business model across multiple markets rather than a single product line or market.
In other words, the dividend looks secure, and it has room to grow over time. That makes Manulife especially interesting for long-term investors who want income and stability in the same name.
Will you buy this undervalued dividend stock?
Manulife is a compelling, undervalued dividend stock. It combines a steady and growing income stream with improving operating results within a defensive and diversified business model.
In my opinion, a small position in Manulife can be a valuable addition to a well-diversified portfolio.
