Sun Life Financial Inc (SLF.TO)

He prefers SLF-T for an insurance pick. It looks more attractive because you get a higher return on equity. He looks at price to book and compares to return on equity.

This is a decent story. Have been achieving their goals they laid out a couple of years ago. In terms of core earnings growth, in the 8%-10% area, they had a good run based on the MFS doing extremely well in the period of equity strength. Just did a large acquisition in the US. Have de-risked the company significantly over the last number of years. Prefers this over (MFC-T).

Manulife (MFC-T) or Sun Life (SLF-T)? Likes Canadian lifecos better than Canadian banks or US lifecos. A lot of these Canadian lifecos have had very considerable exposure to the US$, so the massive depreciation in the Cdn$ is really filling things up nicely. If rates are headed higher, the spreads of the underlying of all the new businesses are pretty good. He has been doing some research, and is possibly going to switch out of Manulife and into this one. The lifecos space in Canada is a place that can do very well.

Insurance companies have held up much better than the banks, and this company has knocked it out of the park in the past few quarters. Stock price has really done well. All the lifecos in Canada are doing the right thing by trying to grow the wealth management side of the business. Interest rates going up will help the lifecos, but it doesn’t look like that is happening anytime soon.

Very well-managed. They will be a beneficiary of higher interest rates. They continue to grow their business, both domestically and internationally. Have a number of different product lines now. Expanding more and more into the asset management business. Multiple is pretty reasonable, but a little higher than the banks.

Added to his holdings this week on its weakness. Gives you a dividend at 3.6%, which should increase nicely over the next several years by 10%-15% on an annualized basis. Have a good mix of insurance on the asset management side, so they are going to take part when the interest rate moves upward. There are also going to take part in the equity markets doing well.

They are going to benefit from bond rates going up, but are also one of the biggest money managers in North America. That is a highly profitable growing business. Raised their dividend this year, for the first time since the financial crisis, and he sees this continuing over the next few years.

3.5% dividend. It is his largest position because it has performed well recently. He doubled his position last summer. He is in it for wealth management as well as the possibility for interest rate hikes. He would wait for a pull back before accumulating more.

There is a seasonal gain that occurs on average about Feb-March all the way through to July. It doesn’t necessarily go negative seasonally, it is just not very positive.

It is the only financial stock in Toronto that is on an uptrend. Banks are still groping for a bottom. This is the one that has broken out. He feels that there are many positive things about it. It has good upside potential.

This is mainly Canada and the US, which is what he likes. A good safe stock and he can see it increasing its dividend in the future. Prefers this over Manulife (MFC-T) because of Manulife’s involvement in the Orient. Dividend yield of 3.15%.

Insurance companies have more global representation than the banks. Also, interest rates have to go up to normalize levels at some point. He has been adding insurance companies because of those reasons. (See Top Picks & Past Picks.)

(A Top Pick June 24/14. Up 14.76%.) With better equity markets and rising bond yields, the life insurers will do well. They have a balanced approach in terms of growth by investing in North America and at the same time getting into emerging markets.

He likes the life companies. They have been doing better. Higher interest rates are helpful and if we get into better stock markets that too will help. SLF-T are in the far east and he thinks they will do well. Not his prime choice, but he does like it.

You want to be in this sector in the fall when interest rates go up. Technical resistance at the $44 area. If interest rates go up he sees $54.