Sun Life Financial Inc (SLF.TO)

It's been rallying lately. The insurers, like the Canadian banks, benefit from a large money management business which grows along with the stock market. Also, the lifecos hold long-lived liabilities that will benefit when interest rates fall, which is another tailwind. He is cautious about the lifecos, because they have gone into private credit, a sector that has seen losses.

At 11.7x PE for 2027, trading cheaper than the banks. Decent quarter. US is improving, but dental is still challenged. Canada missed. Not cheap at 2.5x book, only 5% growth. He'd be selling calls.

It used to be all about SLF, the shining star. MFC was in the doldrums following the financial crisis. Recently, MFC has taken the lead. SLF has had issues with asset management. Chart shows it's not doing badly.

If you own it, don't be afraid of it. He needs either a macro or company-specific hiccup to happen before putting new $$ to work in the market. Watch out for headline contagion risk from private credit issues.

Owned in the past. Now MFC is his only insurance position.

SLF and MFC remain two of his core holdings in financials. The restructuring announcement from a couple of days ago should prove quite profitable. Last quarter's ROE was just over 18%, aiming for 20%. 

Still a Buy at current levels.

SLF is much more into mutual funds, considered a mature business vs. the wealth businesses of the banks. Overall, insurance is enjoying high rates, but the market feels that rates will come down in the future.

His preference is to own SLF and MFC in the sector. Likes their growth in Asian asset management.

A great, well-managed company. The institutional business is picking, but retail is falling. He will hold for a long time and will be fine. Buy around $80.

Holding onto this one, despite selling MFC due to range-bound performance right now.

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.

SLF reported an underlying EPS of CA$1.79, in line with expectations of CA$1.78. Underlying Return on Equity (ROE) declined slightly to 17.6% from 18.1% in the same quarter last year. The financial leverage ratio remains healthy and in line with historical averages. SLF’s results across segments demonstrated healthy growth, except its asset management & wealth segment, where income was in line with the prior year and assets under management (AUM) growth was only 5%. The company spent $400M on share repurchases during the quarter. The share price is under pressure as SLF mentioned the company could miss its 2025 profit target for its dental business in the U.S. due to the uncertainty around Medicaid funding. Overall, results were not that impressive; that being said, it is just one weak quarter. We think the long-term thesis of SLF as a high-quality dividend growth insurance name is still intact.
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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.

If you own, hold on. Yield curve is somewhat favourable to them as it's normalizing (with short rates dropping and long rates staying put here and in US). Valuation is fine, below the banks. Delivered on last 2 quarters. Not much growth. MFC has done better job expanding in Asia. Decent yield.

MFC is such a complex company, really hard to figure out. If he can't figure it out, he just stays away. If you compare the two right now, SLF is incrementally more profitable and more transparent. Nothing compelling about the price.

Insurance is the space to be, but is this the one to buy? Had some challenges with US side, though beat recently and trends are starting to be more encouraging. Really nice dividend. 9.5% growth rate, trading at 10.5x PE for 2026.

If you own it, hold. But for new $$, he'd prefer MFC or POW.