Manulife Financial (MFC.TO)

The recent quarter was a mixed bag, and a lot of people didn’t see the write-downs coming in the energy investments they had. Overall, that is not a big deal. Management has well repositioned this company changing its product mix to be less market related. Their expansion in Asia has been particularly strong. Dividend yield of 3.19% and he is expecting more increases to come. Probably has one of the best balance sheets in the industry. If we end up in a market with rising interest rates, insurance companies benefit.

Manulife (MFC-T) or Sun Life (SLF-T)? He likes both businesses. They are great income producing stocks to own, just like a bank, that you want to own for the long-term. Valuation is not so cheap right now that you can make a large amount of money in a short period of time. He would choose this one because the institutional money managing business of Sun Life has been doing very, very poorly.

45% of their revenue is coming from the US, giving a nice FX tailwind. Growing really well in Asia, in the US and in Canada. Cheaper than its peers. Dividend yield of 3.15%.

(A Top Pick Sept 11/15. Up 7.52%.) In September there was a lot of concern about China. As soon as this happens, people sell the stock. In reality, only about 2% of their business is mainland China, the rest being Hong Kong and Japan. When rates start to move, that will be a positive. Also, a significant amount of business outside of Canada is going to be positive on currency translation.

Prefers Sun Life given its more diversified basket of operations. Sun Life looks a little bit stronger when you look at the charting and the fact that it is trending above moving averages and starting to break out. Manulife is a fine company and there is nothing wrong with it.

The first insurance company into the far east and this is going to be a tremendous growth area for any insurance company. They cut a deal about a year ago with a major distributor of financial products which could produce great benefits for them. Higher interest rates will benefit. Between the target price and dividend yield, he can see a 19% potential return. Dividend yield of 3.07%.

He liked insurance companies a whole lot better when there was a good possibility that US interest rates were going to be raised. Higher interest rates would have helped the insurance industry quite a bit. This stock has set back to a fairly attractive level. A small dividend of a little over 3%. It has lots of upside potential. Very reasonable PE. As an investment, it will probably work out okay.

There was a bottom in September. They took a while to work through the ’08 problems. He prefers SLF-T. MFC-T will run into resistance at $22.50. It might chew threw that, but this one does not have seasonality into November.

(Top Pick Sep 15/14, Up 0.44%) International growth has been strong. They still lever somewhat to the market and are highly levered to higher interest rates, which have not increased. He still likes it. It looks fine to him.

It got beaten up pretty well. He predicts 18% growth. They say they are on track to meet their core expectations for the end of 2016.

If you own, would you averaged down on this? Dipped below $20 this week which is a decent price for it. It should have some measure of recovery. He would consider adding to this at $20 or below, in order to average down. Have very good growth prospects in Asia.

It is the only one of the three delivering good financial and operational results. But life insurance companies are not necessarily the best financials to be in. He has no lifecos because they have a difficult time in a low rate environment. He has banks.

(A Top Pick Sept 13/14. Down 6.3%.) This will benefit from higher rates. He would be a fairly aggressive buyer at this price.

This is a good time to upgrade your portfolio. Look for large cap stocks that have been beaten down significantly, for reasons that are maybe not justified. This company fits into that. This has been soft because of the link to the equity markets, but also because of the Asian part of their business, where people just automatically assume that is China. Actually very little of their business comes from mainland China. It is predominantly out of Japan and Hong Kong. Dividend yield of 3.36%.

Manulife (MFC-T) or Sun Life (SLF-T)? Likes Canadian lifecos better than Canadian banks or US lifecos. A lot of these Canadian lifecos have had very considerable exposure to the US$, so the massive depreciation in the Cdn$ is really filling things up nicely. If rates are headed higher, the spreads of the underlying of all the new businesses are pretty good. This one seems to be suffering a little bit more from the Asian market exposure, which could prove to be short-lived and a lot of worry about nothing. The lifecos space in Canada is a place that can do very well.