Manulife Financial (MFC.TO)

This is a good long term high quality company at these price levels and likes the dividend growth record. The new management team is solid. He likes their core wealth management business. Trading at less than 10 times 2019 earnings, this is a good buy. Yield 3.7%. (Analysts’ price target is $29.65)

He attended their investor day yesterday. It showed some of the work they are doing to clean up their legacy business. They have two real superstar crown jewels: Their Asian division and their wealth management division. Dividend is likely to grow. He thinks it is good value right here.

It has recently had good news on rate increases. They have transitioned from just insurance to wealth management products. In Canada they plan to digitize the back office and reduce staff by 700. The valuation is still a little high, compared to the bank sector.

It's a little undervalued. Earnings are fine. Everything is fine for this to grow. Bay St. has a $30 target. There'll likely be a dividend increase in six months. He'd buy this under $25.

Does it make sense to buy in a raising interest environment? Yes. They have some legacy issues. Still earnings are 19% up. Capital position came out at the higher end of the range. Growing at 10% a year and trading at 8.8 times earnings. 9% dividend growth. A name to own right here right now.

They have a great, rapidly growing franchise in Asia and a good one in Canada, but their John Hancock operation has been difficult for them, dragging on their ROE. They need to exit--or do something with--Hancock, which is the root of
their problems. If they do, their stock will go up. They should sell Hancock and reinvest in Asia. The rest of their operations are doing gangbusters.

He does not have a great explanation for why this is not advancing like Sunlife, especially with higher interest rates recently. His fundamental analyst thinks it has some weaker financials compared to the other insurer. Yield 3.6%.

A play on higher interest rates. Good growth in Asian operations. The recent pullback it fell below 10x earnings. Thinks this will reach $27-28 easily. Probably a dividend increase in 9 months. (Analysts' price target: $29.86)

It has traditionally seen a hard time with its share price going up. He would not get overly attached to it. They have passed the capital requirement for insurance companies. 3.5% dividend, 10 times PE. But a lot of metrics are similar to the banks, which he prefers to MFC-T.

They should be doing well. Interest rates are creeping higher, which should be good for them. However, they are facing higher capital requirements, which raises some concerns. This is probably what is depressing the stock price. The stock pays a decent dividend so he doesn’t mind waiting until they fix their capital structure.(Analysts’ price target is 30$)

The stock has been choppy. She's spoken to the CEO and thinks he's good. They're dealing with legacy products (long-term ones that are typical in insurance), and many of these were not priced correctly. That's an overhang. MFC had a good Q1. It enjoys 30% of its operations in Asia. It's increased its dividend. As they distance themselves from legacy products, their core earnings will grow. She expects the stock to hit high-$20s by end-2018.

It went through its struggles during the financial crisis. They have been one of the more successful companies expanding into Asia. Their ratios are in great shape and earnings are growing in double digits. It has become a well run business once again.

There are some concerns with its legacy portfolios. Nice growth in Asia. Trading at 8.5 times. Cheap sector at 9.5. Dividend of 3.7%. (Analysts’ price target is $30.04)

When the economy improves and interest rates go up, insurance companies should see earnings improve. He far prefers Sun Life (SLF-T) as MFC-T had to cut dividends during the financial crisis, but SLF-T did not. There are some issues about the guaranteed contracts they sold, leaving speculation that higher liabilities than expected. The dividend is okay and it has started to rise again. It is an okay company

He's long MFC. He likes the story and is pleased by today's earnings report. The core earnings see decent growth and earnings. They are great beneficiaries of interest rates rising. They have better international diversification than other
Canadian lifecos, which enjoy attractive vauations overall.