Stock price when the opinion was issued
Start with valuation -- 10x 2026 for 12% growth. A few bad quarters with a weaker US, which caught market by surprise. Outlook improving. Worst-case on the tariff war (which is not his base case), there will be less $$ floating around to buy insurance products.
Don't buy this name right now. Longer term you're fine. Steady compounder, safe dividend that will grow. Instead, he'd buy MFC on its cheaper valuation (which, for him, makes it safer).
Their last quarter was penalized due to some stop-loss insurance on their books and a small impairment from an investment in Vietnam and softer flows at MSF, their US investment arm. Is now in a range worth buying. This and MFC remain core holdings of his. It yields a safe 4.13%
(Analysts’ price target is $86.45)Now is a good time to take some money off the table. Financials have outperformed the fundamentals in the next few years. Wait for a better entry point, when the market dips as it did in early April, which he expects in the near future. Good company, track record and dividend. No problem with SLF fundamentally.
Beat EPS estimates today. (MFC had a lower week as well.) High quality. Long term, exposure to Asia and aging demographic make a lot of sense. 10x forward PE, not bad. Nice yield of 4.5%, especially in falling interest rate environment, and expected to grow 8-9% annually. Could be an opportunity.
It has large businesses in India and the US. Canadians overpay for life insurance because of the lack of transparency, but this benefits the lifecos. Great earnings and dividend growth and margins. A great track record, too.