Manulife Financial (MFC.TO)

This is going to have the same backdrop and look a little like Toronto Dominion (TD-T) and a lot of the banks. Chart shows a little downtrend. Insurance companies did get a little soft, because they are not pure financials. This is a good stock to hold. These benefit from a strong market. If it got a little lower, around the mid-$25, that would be a good place to step in.

The stock hadn't done much for a long, long time. It’s finally broken out and making some progress. Chart shows a developing channel of higher highs and higher lows. If you own, you have to be patient. Quite likely, too many people were too bullish for too long. The market takes time to digest.

This is very interesting and has a very strong franchise in Asia. They have some very good high ROE Canadian businesses. The big decision for them is a need to get out of the US business and drive their ROE higher. If they can do that, the stock will do much, much better. A great story and pays a good dividend yield.

This has been a gift that keeps giving. It has done very well over the last few years. He has this trading at 11.1 2018 versus Sun Life (SLF-T) at 11.4. There has been convergence amongst all the insurance companies in Canada. To him, this is a good deal. He models it growing at 9% with a 13% dividend growth. Good balance sheet. On a little bit of a pullback, you could buy this.

They have operations around the world. They are the large asset business in Canada and the US. The new management was positive for the stock and it had a good run. He would pick SLF-T over MFC-T, however. Both are decent investments.

(A Top Pick Feb 1/17. Up 11%.) The life insurance industry is very well positioned to take advantage if we have rising rates going forward. This company has always been particularly adept at placing itself in Asia where there is a tremendous amount of growth. Well diversified. With the new CFO, he thinks they are going to pay attention to some of the legacy problems they've had in the US. Overall, he expects profitability and margins will have a very good chance of increasing fairly significantly over the next while. This is still a Buy.

(A Top Pick Nov 18/16. Up 21%.) He still likes the insurers. Trading at 1.4X Price to Book which is not bad. 3% dividend yield, with a decent healthy growth rate. Rising interest rates and a stronger economy is going to help insurers like this. They are diversified into the Asian space, which should help them longer-term. A solid, steady name going forward.

He would prefer it a little cheaper, perhaps $24-$25. He likes this longer-term. Good business and good growth in Asia. The question is, can they offload some of their poorer US businesses. Overall, this is a good company. They increased their dividend last year by about 10%, and he expects another increase this year. (See Top Picks)

Banks? or lifecos? He sold MFC-T about a year ago. They are a great play on rising interest rates. He did not think they would go up as fast as they did and so he allocated to bank shares.

(A Top Pick Jan 11/17, Up 13%) They have a great deal of exposure to fixed income. There is a new CEO who is quite impressive. Their Asian operations are their crown jewel. The 3% dividend should continue to grow.

Manulife (MFC-T) or Sun Life (SLF-T)? Insurance companies tend to move up and down with interest rates. If you continue to see the interest rates gradually move up, it will be a positive. ROE’s are decent. Both are benefiting from what is happening in Asia. Both companies are fine.

MFC-T vs. SLF-T. It is a close call. He would have to go with MFC-T because he believes they have more recovery upside. MFC-T has some issues but if they address them they will have more upside.

Has a very strong Asian franchise, which is very beneficial, as it is the high growth area of the world. The issue he would have is their earnings sensitivity to the interest rate curve, which continues to flatten.

Doesn’t follow this closely. Canadian operations appear to be excellent and well run and have a strong position in the market. Looking at lifecos in general, in the current environment where it is very difficult to get investors deposits in SEG funds, it is the change in interest rates that is really going to impact earnings growth. If interest rates go up, then lifecos benefit because the present value of liabilities is reduced. It also has exposure to Asia, so you have to make a call on this factor.

Sun Life (SLF-T) or Manulife (MFC-T)? In a slowly rising interest rate environment, both banks and lifecos will benefit, and you want to have representation in both groups. She owns 3 banks and 1 lifeco. Both have done well. This one was lagging, but has now played a bit of catch-up. Both just reported good results. Her preference would be this because she likes their Asian exposure, which will be a faster growth market.