Manulife Financial (MFC.TO)

Both MFC-T and SLF-T benefit from the same trends. Over time rates will rise and benefit their businesses. SLF-T has a stronger balance sheet. SLF-T talked about returning capital in the form of a dividend and share buybacks next year. He would wait until a hint of rates going up.

Now a well run company compared to his past history. One big proxy has always been a rising interest-rate environment. Feels the value proposition, in terms of its growth in Asia and its footprint in a core business environment, looks interesting. Yield of 2.93%.

This is now in a very good space. Trading for 13 or 14 times earnings, but earnings are really poised to jump here. He is looking at earnings going from about $1.55 a share this year to the $2 level in 2 years from now. Also, looking for more dividend increases.

This insurance company versus banks? They have done a good job of moving the company in the right direction. Where insurance companies really make money is in a much higher yield environment. He thinks interest rates are going to stay relatively low for longer than people think, so that really hurts this industry. He would rather put his money in a bank, which has better opportunities.

Likes their Asian position. Asia is still growing at a pretty fast clip and is not a concern to him. Prefers Sun Life (SLF-T) which can do a little bit more with their capital.

Banks or Insurers? He thinks he would lean more towards lifecos at this point on a longer-term basis. There is a little bit of risk on this one short-term, which is why there was a selloff. There is still real leverage within the portfolio regarding higher interest rates and stronger stocks. There might be a little bit of earnings risk on this so he wouldn’t put all of your money in.

He likes this. When interest rates normalize and equity markets continue to move forward, companies like this will do well. They have a huge exposure in Asia, which is a growing market. The concerns right now are about international markets, but those are short-term concerns. This is well-positioned for the long-term. Pays you well over a 3% yield with probably a 10% growth rate on that yield over the next 3 years.

The model price is $23.09, a 12% upside. It did an acquisition awhich he does not included in his balance sheet. The risk is that it could fall all the way back to $17.90. If you are a trader, that is your risk level. 3% dividend yield.

This is an OK situation now. He prefers Sun Life (SLF-T) or Power Financial (PFC-T). A lot of their projections to future growth are built on continuing success in China. He has a bias against that type of situation. He has watched what has happened to other companies that are operating in China. If there is ever a political problem, you get nailed.

Over the last year he has built a good sized position. He focuses on wealth management. A big percentage of their earnings come out of the US. 19% growth there last year. It is hanging in like a champ in a down market.

(A Top Pick Oct 22/13. Up 19.31%.) Trading at under 1.5X Price to Book. We could see some rising interest rates, which is always good for insurance companies. This company has a strong base of operations in the US, Asia and Canada. The wind is at their back.

Part of her investment thesis on this is that interest-rates are going to go up, which will help this company’s investment portfolio. The fallout from the 2008-2009 collapse is largely behind them now. The new CEO seems to be relatively more conservative than the previous one. Increased their dividend by 19% last quarter. Acquired Standard Life which will expand their presence in the low volatility business and gives him a good share in Québec. There will be some cross-selling of product later this year or early next year. Dividend yield of 2.92%.

Their recent acquisition of Standard Life to gain a foothold in Québec wasn’t a blow out acquisition and was a little expensive. With these types of companies, you are always going to get a little volatility when markets go down. He owns a bit of this company, and is somewhat constructive on it, really relating to their insurance. If you can, factor out the equity and the fixed income components and focus on what the CEO has been talking about as core, how well they are selling insurance. They seem to be doing quite well.

Likes it. Just raised the dividend. Next increase late 2015. They are beneficiaries of high rates, but have the best growth in Asia (30-35%). Prefers this to any others. Standard Life acquisition was good even if they paid a lot.

Would prefer SLF-T. This one was over leveraged at the wrong time toward stocks in 2007/8. They are now deleveraging themselves against interest rates at the wrong time.