
TSE:MFC
Banks or lifecos? She likes both sectors, so it's not an either-or question. Banks will benefit from the reopening/recovery. She expects earnings upside and revisions probably later this year. Bank stocks have had a nice rally this year, but long term they remain attractive given their yields. The lifecos' valuations remain good, and wealth management offers key growth. She likes MFC's presence in Asia for its strong long-term growth. She owns TD, Royal and BNS.
MFC vs. SLF Equally good. Prefers MFC for the great Asian franchise, which has a lot of opportunity. Has also built a great asset management business that has continued to do well. MFC has a great growth profile at a cheaper multiple. MFC gets the nod, but you can own both. They're great businesses that will continue to pay a good dividend for many years.
The reason it went down after the blowout earnings is related to the financial crisis. During the crisis, MFC almost went out of business. They totally de-risked themselves coming out of the crisis. They never benefitted from good times. The best thing for insurance companies is for interest rates go up. Prefers Sunlife, a much better company.
MFC vs. SLF With increasing interest rates, either makes a lot of sense right now. He owns SLF. With MFC, you get about twice the exposure to the Asian market. SLF has more exposure to Canada. MFC has more beta, higher dividend, a bit cheaper. With the Asian recovery, MFC could perform a bit better. SLF gives you more stability. SLF yield is 3.5%. MFC yield is 4.5%
Interesting, likes the name. Perhaps management doesn't pay out more to shareholders or buy back shares because they want to expand or keep cash on hand. Doing well. Will benefit long-term from growth in Asia. 7-8x forward earnings, with 7-9% earnings growth going forward. Revenues and earnings will grow. He owns SLF and GWO instead. Yield of 4.5%.