Stock price when the opinion was issued
Operations in Hong Kong are an area of growth. China's autocratic economy is a risk. Its business involves local services, so shouldn't be affected by tariffs. Risk is animosity curtailing demand; but MFC is also Canadian, not just US. Slower economic growth will impact all companies, including life insurers. Tends to be more defensive; she's sticking with Canadian banks rather than lifecos.
Insurance companies have been better insulated from tariffs. Interest rates going up would help them. Really nice beat on Q4, really clean earnings (uncharacteristic after the last 20 years). Growing 12%, trading at 8.2x. Yield is 4%, growing ~8% a year. Asset sales.
Could still be a Top Pick in an environment like this.
The insurance business, in general, is not expanding dramatically. You get the nice dividend, which means they're not investing in the business. And they don't invest in the business because there's really nowhere to put their money for a high ROIC. Highly regulated, higher interest rates have a negative impact.
For him, the dividend is not a reason to buy things. Doing a good job, but there are better places to invest in financial services.
Doesn't believe Asian exposure is affected by US-China issues. Would only be affected secondarily if economy started to slow and people had less money in general.
Nice recent beat. Still has momentum in Asia. Wealth management earnings were up 8%, even after the $43M charge on California wildfires. At 9.7x PE for 2026, still cheaper than Canadian banks and than SLF and GWO. Reasonable 10% growth rate. Lowest payout ratio among peers. Another "when", not "if", story. Yield is 4.02%, with nice growth.
Responding to a caller who argued that the company’s financials are strong and asked why it is not selling for $30. Steinberg responded that it is a mistake to evaluate this company on its own. Globally, the financial services sector is under pressure. Global banks are under pressure. European insurers are trading at single-digit multiples. For a value investor, these are opportunities to step into good companies at fairly low earnings multiples. Manulife is well-run, has a healthy level of international business, and pays a good dividend. He expects dividend growth. Rather than being frustrated with companies like this, value investors step in and buy them.