Manulife Financial (MFC.TO)

Well done, usually good to take advantage of short-term panics. 

This name has turned the corner. Good dividend yield. Higher rates let it get better returns on its bond portfolio. Good job growing its business. Reasonable valuation. Less exposed to worries of credit quality. Good long-term investment.

Lifecos traditionally trade at a discount to the Canadian banks. Why? It has to do with growth. Insurance is a mature market. This type of business doesn't deserve a 15x PE, especially the interest-rate risk you take on with an insurance company. To grow, MFC has a more Asian-centred business. In Asia it needs to partner with a local company, and the profit's a lot different than with a 100%-controlled subsidiary. 

Pays out significant portion of earnings in dividends, so it's more an income stock than a growth stock. Valuation is fair. If you want income, can't go wrong here. 

Funnily enough, life insurance companies actually do well in a lower interest rate environment. Plus, it has financial planning and investment divisions. A good non-bank alternative. Should continue to do well -- partly due to lower interest rates, partly due to stock market continuing to do well.

In his value/momentum strategy.

Doesn't own any of the lifecos. This name struggled for quite a while, but then broke out on strategic repositioning by previous CEO. Changes have driven robust EPS growth. Businesses include Canada, US, wealth and asset management, and Asia (a faster secular grower). 

Now trades at premium to banks. Re-rating has largely played out. But if it can continue to grow earnings at high-single or low-double digits, plus dividend yield of ~3.something%, you have a pretty good line to a double-digit total shareholder return. He'd continue to hold.

Sometimes things happen in mysterious ways. Remember that the last price is set by the last buyer; the price you see on the screen is the price where 2 people most recently transacted. That doesn't tell you much about the future of the company or anything else.

Firstly, people have long memories. MFC hurt people so badly in the past, there are some people who just won't come back. His firm tries to be patient, seeing the future of companies when other investors are mad or unwilling. Also, stock has to digest its big move (most of which was last year). He's owned since $20, and is happy with where it is. Finally, most of the money in financials is flowing to banks.

Has performed extremely well. Doesn't disagree with the caller that stock could be $60. But something has to change to capture the attention of investors; for example, if PCLs for banks move up next year, $$ might rotate out and over to insurance.

His preference is to own SLF and MFC in the sector. Likes their growth in Asian asset management.

With a global lens, you don't need to be invested in lifecos. Within the Canadian context, life insurance is a common way to play. This name is attractive, capital structure is good, far more de-risked than 10-15 years ago.

Owns this in a small way, and SLF in a bigger way. Likes the space. Valuation is 1.8x book, not cheap. Management assets should do well when markets are up. Good chance of putting up a very strong quarter. Can move higher, but note that you're buying momentum and not value.

Took profits not too long ago. Range-bound over last 12+ months. In the right spot, and aging demographics will help its asset management. Likes it longer term. Nice dividend yield of ~3.9%, expected to grow over time. He still owns SLF.

Earnings quality still improving, though last quarter showed some negatives in the US. Acquiring Comvest, a private asset management platform, which should be nicely accretive. At 7.5%, not same EPS growth as a year ago. Trades at 9.8x versus peers, 45% payout ratio. Nice dividend, which will have some nice growth.

In general, insurance companies are a better buy than the banks right now.

Higher interest rates are better for insurance companies than they are for banks. So some investors might be selling on recent lower rates. Raising dividend faster than some of peers. Solid company with a dividend, and there's nothing wrong with that.

Stock's been flat and stuck at these levels for the last little while. There may have been a downgrade yesterday. Thinks it's undervalued. Great dividend yield, dividend should remain steady and increase. Steady growth company; sees ~8% going into the next few years. Price-to-book is 1.6x, fairly cheap relative to some peers.

Wait and see. Market's hesitant to push it to new heights. If you forget about the last few months, 200-day MA is still trending higher thought flattening a bit. Stock price is below that now, but it's done that before and moved up again. Getting paid to wait.

Very strong franchise in Asia. Life insurance benefits from aging demographics, as well as people in developing and emerging markets purchasing life insurance for the first time. Undemanding PE. Nice dividend. 

MFC is such a complex company, really hard to figure out. If he can't figure it out, he just stays away. If you compare the two right now, SLF is incrementally more profitable and more transparent. Nothing compelling about the price.

Has done well this past year. Decent income stock. In the financial services sector right now, her preference is the Canadian banks. But you can continue to hold this name. Its focus on services means she's not worried about impact of tariffs.