Gerald Allaye-Chan Sun Life Financial Inc SLF-T COMMENT May 29, 2009

A lifeco, but also offers investment products. Solid, dependable. Never very exciting growth, well capitalized, prudent capital allocator. Dividend well covered and should grow. Asian angle gives it a bit of growth. Yield is ~4%.

He also owns MFC, and you can give that one a look. Similar business to SLF.

MFC has a slightly better dividend than SLF right now, though he likes both names. MFC is also slightly cheaper than SLF, so that's why MFC is in his portfolio.

Was a little turbulent after its earnings miss, but it remains solid. Don't sell. It will return to and exceed previous highs.

Benefits from demographics and growth engine in Asia. Recent results not that strong; dig more into those before you jump in. Good, long-term business.

Some weakness in recent results. Sometimes when a stock's run up, and results come in lighter than expected, stock sells off on a trade. Fundamentals haven't shifted significantly. Relatively stable earnings, so it's good for income. Asset management divisions can be lumpy with interest rate moves. Reasonable investment for income with some growth.

She owns CB.

Best-performing insurer through the financial crisis. Largest foreign insurer in India, so not just in Canada. Great job in life insurance and asset management. Conservatively run. Steady dividend grower. Looking for 7-10% earnings growth over time. Core holding for him.

As a value investor, not growth, he didn't like SLF when markets were ripping higher late last year. However, if this falls down to its trend line of $70, he would buy.

Over time it should get back to $88. Life insurance companies have less exposure to tariffs and recession than banks. Banks are more vulnerable to rising unemployment. Near term, life insurance companies are better buys than banks but longer term banks are better.

Its EM exposure was always viewed positively because it helps to propel growth. That's flipped a bit against it. Very well run, attractive dividend. An income name. If you own, just sit tight. He owns GWO instead.

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).