Stock price when the opinion was issued
Nice Q4 beat. Provides some shelter from tariffs. Still trades at slight discount of 9x, growing ~12%. Nice dividend. Competitor SLF is the one that's had 2 negative surprises in a year.
Still a buy, but be aware that investors are flocking to this area, so it could eventually drop. Great compounder from here for the next 5 years.
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.