Manulife Financial (MFC.TO)

Thinks they will increase their dividend over the next year or two. Cheap multiple compared to historical rates. Management is doing all the right things. They haven’t done much this year because the yield curve has been coming down. If it normalizes, this could be a double.

The worst is over for this company. Earnings rebounded this year and he is looking at double digit earnings growth for 2015. To him, that means we are going to start seeing the dividend increasing again. They are suddenly doing everything right. Have a great global presence. Their whole hedging strategy, which caused them problems, has been well thought out and cleaned up. Dividend yield of 2.5%.

Already significantly reflecting forward revenue from increased interest rates. If it pulled back to recent support, it would be more of a topping pattern for this one.

In a recovery phase and thinks it is fully priced. One of his concerns is that they have a lot of eggs in the Chinese basket. Things over there are looking at little bit on the dicey side and you are never quite sure what the government is going to do. Has a pretty reasonable dividend. Prefers Power Financial (PWF-T) which has Great West Life (GWO-T) or you could choose one of the other like companies that has a good yield. Not a bad part of anybody’s portfolio to have an insurance company.

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.