Manulife Financial (MFC.TO)

Has had a nice recovery. All the lifecos have done well. This is not as cheap as it was and on a Price to Book value it is not as attractive.

A problem with the life insurance businesses is that it is very hard in this low interest environment for them to make money. Stock has come back because the environment is a lot better for equities which have helped a great deal. Have a very strong franchise in Asia. Would prefer to be in banks.

Prefers Sun Life (SLF-T) which is a better managed company and not as leveraged. This lifeco works better when things are hopping. Had to cut its dividend, and as earnings come back, it should have room to bring them back. This is the biggest in Canada and is very big in the US where it owns John Hancock. This is where its problems came from and it is still not running as well as it should. Also, have their Asian growth market.

Feels this is a Buy, but amongst the large-cap financials, it wouldn’t be his strongest. Probably CIBC (CM-T) would be his favourite. Among the lifecos, this is the best one to be with.

(A Top Pick May 31/13. Up 29.43%.) Everything is now going right for the lifecos with bond yields going up and the stock market going up. This gives you a reasonable yield and there could even be dividend increases now.

Expects interest rates to rise and the anticipation they will rise helps as far as valuation goes. Good growth (35%) in Asia. Higher rates probably give you 15% earnings growth on their core earnings. They are telegraphing dividend increases starting in about 9 months and this will help the stock a lot. Looking for $24.

Missed the run of the insurers. There is no doubt this one has had a very good run and he doesn’t see any reason it is going to suddenly come to an end. It may be flattish for a bit.

Positioning in Asia is more beneficial for MFC than SLF is for long term growth. It is about posting sustainable steady earnings growth. They may increase their dividend, which they have not done in awhile.

This is a good environment for lifecos. Canadian lifecos are great. He would be happy buying any of them.

If he was going to own a life insurance company this would be it

A big part of the outlook is dependent on interest rates. He thinks over time they will move higher and that will be a benefit for MFC. You might wait for a pullback because when interest rates backed off a little, these stocks did not sell off.

Lifecos do well this time of year, into the spring time. Earnings were just under expectations. Thinks we can move up from here. He would prefer SLF-T, however.

Part of the reason the stocks have been hit is because of interest rates. Interest rates will go up over the next few years, gradually and this insurance company and the others will do well.

Earnings might have been slightly disappointing for the market, as the stock dropped off today. Core earnings were below estimates. Doesn’t expect too much dividend growth in this company in the very near future. Thinks this will do well in spite of missing earnings.

Tremendous amount of earnings power here. Think about it over the next 3-4 years. Reports later this week and we should focus on core earnings and how they are tracking. Stick with it or build positions here. A decent investment.