Sun Life Financial Inc (SLF.TO)

(A Top Pick July 31/15. Up 1.29%.) All the life companies seem to be under pressure. This has a reasonable dividend. They are very good in the wealth management business, and they are not in any casualty business. He avoids the casualty business like the plague.

This pays about 3.7% dividend yield, and is trading at about 11-12X PE. Canadian banks give you a similar valuation and also pay a higher dividend. He finds Canadian banks are more attractive.

Relative to the banks, insurance companies are relatively good buys. However, he would prefer Manulife (MFC-T), which you can get at a discount to BV. Sun Life is trading at around 1.4X BV. Sun Life’s core growth is over 10%, largely due to their expanding footprint in US group insurance. They have a wonderful asset in the US, MFS, which is a great financial company. Yielding around 3.8%.

Has a decent amount of business that is impacted by 1% interest rates, so you are getting squeezed. Has a wealth management business in the US which is doing okay. This has been the best performer in the last couple of years of the lifecos. If you think rates are going to go higher over the next 2-3 years, Manulife (MFC-T) will be the better one.

A well-run company, but has sold off dramatically. It has come back quite smartly, possibly because of the shutting down of the real estate holding fund in London. Dividend yield of 3.95%.

Likes this. Dividend yield of about 3.67%. Compared to some of the other Canadian insurance companies, it has a very balanced mix. Has a very stable business in North America, but also has exposure to emerging markets. They have the wealth management side as well as the traditional life insurance.

(Market Call Minute.) If you have to have a Lifeco, Manu Life (MLF-T) has been beaten up more and has more of its revenue coming from Asia.

Feels the insurance sector is underappreciated and there is room for potential upside, especially relative to the banks. A solid hold for the long-term, but you have to decide whether you want to be in the insurance space or the banking space. He would be more motivated by insurance.

Sun Life or Canadian banks? He likes this on a valuation basis. The PE is similar to the banks. Free cash flow to EBITDA is something like 18%. This will be affected by interest rates more so than the banks.

Large Canadian financial life insurance company with global operations, mostly in Canada and the US. The problem has been the yield curve, which needs to steepen, which is when all financials will do well. He owns Manulife (MFC-T) instead.

This is seen as having a lot of exposure to wealth management. Anything with a touch point to wealth management going through end of December-January, early February was going to have difficulty in a weak market over macro concerns. This company is doing a good job in building their business. Money is now rotating back into equities. If your view is constructive on markets, your view on this company should be there as well. This is probably okay going forward.

She owns MFC-T. Outflows from their funds are a headwind. Lifecos are all attractively priced here. She prefers MFC-T because of their 30% Asian exposure.

This is an insurance company that he likes. The multiple and yield are okay. Likes the way they are doing business. A good solid business. Their wealth business is doing quite well.

(Top Pick Jan 16/15, Up 12.79%) People were playing it as a rising interest rate trade, but interest rates did not go up. He plays it on the aging demographic and turning lump sums into monthly income. This is his preferred pick.

Sun Life (SLF-T) or Manulife (MFC-T)? A hard choice. He owns Power Financial (POW-T) which owns Great West Life (GWO-T), because he likes the additional assets they have. There is a bit of a feeling that insurers may be a better deal than banks with the banks having to shore up their loan loss provisions. Would probably rank this as a tie between the 2.