Sun Life Financial Inc (SLF.TO)

Thinks it’s attractive. Has a good chart. 5.3% dividend. Lifecos seem to be adjusting to life in a low interest-rate environment. Projections for this year and the following year look good.

Sold his holdings about 2-3 weeks ago because it was getting quite overbought. Lifecos really depend on what interest rates are doing and what equity markets are doing. With equity markets in the US starting to perform, a lot of the insurers start to do well. Interest rates will remain low, but at least on the side of the equity have been doing well. If you own, you might consider taking some profits. Yield of 5.9% is pretty safe.

Right now the dividend appears to be pretty safe. This quarter they are going to have their annual actuarial review, so there could be a further write-down. Earnings have been really good but they are still held hostage to bond yields. If you own, consider taking some profits or selling Calls.

If you are investing for 3 to 5 years the life-cos should do well. This quarter they are having a slight improvement. The interest rate environment is not good. We are going to see some adjustments to their longer term assumptions in terms of investment rates. This has been more than discounted in the price. Life-cos could participate in fairly significant capital appreciation if we have positive equity markets and interest rates rise, which he feels will happen.

Has tended to be a little more cautious on insurance companies. They fund liabilities through their investments, equity investments and debt investments. Haven’t made much money through the low interest-rate environment. Because of that they have had to hold back more cash to meet capital requirement ratios, which has limited their ability to grow. If you want to own an insurance company, he would rather you had Manulife (MFC-T).

Part of the problem with insurers is they have interest rates and the market working against them. If we see the TSX starting to move up nicely this is probably a good bet. If you see this close about $26 on a weekly basis (on a Friday close, if one data point is above $26 for the week) it is probably a pretty good bet.

Owns the XFM ETF instead. Had a good year in terms of total return. Little headwinds in terms of guaranteed withdrawal programs. Less volatile and not exposed to individual company risk.

He moved from the insurers to the banks a couple of years ago and hasn’t yet gone back into the insurers. You are probably not bad off owning it now and thinks the dividend is sustainable. He would rather be with the banks.

Buying a stock such as this that would go up with interest rates but also buying a utility stock Canadian Utilities (CU-T) or REIT that would benefit from continuing low interest rates, and collect dividends from both stocks. Good Hedging Strategy? You just explained the benefits of having a diversified portfolio. Good strategy, but you have to be careful that in this 3^rd quarter, they are going to have an actuarial review and might have to take down another charge.

Have had a change of management and have been busy de-risking their business to a great extent. Their investment arm in the US has been doing very well. Got out of their UK exposure. Currently selling at book value. This is an investment for over the next few years.

Yield of close to 6%. Thinks it’s pretty stable and doesn’t think it’s ready to break out and move up a high percentage. Good dividend. As long as there are no major shocks in the economy in Europe or here, this dividend should be pretty safe.

Almost 7% yield. As long as it keeps its minimum capital ratio above 200% the dividend is absolutely secure. Since the financial crisis, all the business they are writing is a very profitable business. Great operations in Asia including in India where it is becoming a major player.

Bought this as an anti-bond market play, which is why he still owns. Life insurance companies suffer when interest rates are really low. Looking out 2-3 years he thinks interest rates will be somewhat higher. 6.3% yield, which he believes is safe.

Last quarter looked a little better. Interest-rates and equity returns were a little kinder to them but there were a lot of one-time things in that quarter. Overall core earnings were somewhat weak. The “Ultimate Reinvestment Rate Risk” is what he always focuses on for insurance companies. Should improve a lot from here. 6.3% dividend could be in danger but expect they will be very loath to cut. On a valuation basis, he would prefer Manulife (MFC-T).

Preferred D. This is a good one to hold. They are trading below the par value of $25.