Manulife Financial (MFC.TO)

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.

This is one he likes. If you have tracked this over the past year, you will notice that numbers, quarter by quarter, have been increasing. The numbers continue to track upwards. There is probably still room to grow. They are very big in asset management and continue to expand there.

Sell bank stocks and put it into Manulife?She likes Manulife, because she feels the new management team will be more aggressive in selling off some of the assets that are not a good fit or are not growing as fast. Her feeling is that they will sell assets as opposed to selling off the whole John Hancock company. They are doing really, really well in Asia. A unique way of playing Asia. This is probably going to be her biggest weighting after they report. The growth of Manulife could possibly be better than the banks.

(A Past Top Pick Oct 28/16, Up 42%) He still likes it quite a bit but it will not do the same this year. There will be a hiccup due to hurricanes this year but there should be a dividend increase in 2018.

He sees more upside (10-15%). Be careful because they report the third quarter a week today and there will be some onetime charges that he knows about, not everyone in the market does. There may be $0.50 downside and that would be when to buy it. (Analysts’ target: $28.00).

A great long term compounder but short term it is outperforming in Asia-pacific. That is caused by a desire for nationals to get money out of the country so he is suspicious of the growth going forward. It is It is a long term opportunity but he is not bullish short term. It is doing a great job in Canada and the US looks to be on track.

Had a pretty nice run some months ago. His concern is that there is too much emphasis on building their far east, particularly their China business. Financial institutions going into China are subject to a situation where their business could disappear overnight if the Chinese government decided to step in. He would rather go with Sun Life (SLF-T).

He can’t comment on the day to day performance and possible short selling. They have a very significant presence in fast growing Asia. He has nothing negative to say about them. They suffered from complicated accounting. If you think interest rates will go up over time then they will benefit. You should not worry too much about day to day volatility.

(A Top Pick Oct 26/16. Up 37.61%.) Had seemed like a no-brainer in that their earnings had had been pretty solid along with the talk about interest rate hikes. This can be a core holding for most people. Dividend yield of 3.2%.