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Should You Hold Manulife Financial (MFC) in Your Portfolio?
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Manulife Financial Corporation (MFC - Free Report) has been in investors' good books on the back of higher sales volumes, favorable product mix in individual insurance, higher investment income and financial flexibility.
Growth Projections
The Zacks Consensus Estimate for Manulife Financial’s 2023 earnings per share is pegged at $2.36, indicating a year-over-year increase of 3.9%. The expected long-term earnings growth rate is pegged at 10%.
Earnings Surprise History
Manulife Financial has a solid track record of beating earnings estimates in five of the last seven quarters.
Zacks Rank & Price Performance
Manulife Financial currently carries a Zacks Rank #3 (Hold). In the past year, the stock has lost 4.6% compared with the industry’s decline of 15%.
Image Source: Zacks Investment Research
Return on Equity
MFC’s trailing 12-month return on equity was 12.1%, which was better than the industry average of 11.5%, reflecting efficiency in utilizing shareholders’ fund.
Business Tailwinds
The life insurer stands to gain from three of its highest potential operating divisions, Asia, Canada and Global Wealth and Asset Management.
Courtesy of higher sales volumes, a favorable product mix in individual insurance in Canada and the favorable impact of product repricing in Hong Kong, business gains are expected to be higher.
The core earnings of Manulife Financial are likely to gain from higher new business gains along with solid net fee income from higher average assets under management and administration in the Global Wealth and Asset Management business. Higher investment income and double-digit in-force business growth in Canada and Asia should also add to the upside.
Manulife targeted an expense efficiency ratio of less than 50% or $1 billion in cost savings and avoidance by 2022. MFC expects $200 million of these savings in 2022. The life insurer estimates these businesses to generate about 67% of total company core earnings by 2022. The insurer remains focused on driving efficient growth and ensuring scalable growth, outstanding customer experience as well as digital ways of working.
Manulife has an impressive inorganic growth story. Acquisitions have helped Manulife add scale to its core business lines in Canada, including insurance, group benefits, group retirement and retail wealth, besides accelerating growth in Asia and consolidating its presence in the mid and large-case markets. Strategic buyouts also reflect the prudent use of capital in high-growth, less capital-intensive and higher-return businesses.
The life insurer boasts financial flexibility by virtue of solid growth in new business value, robust annualized premium equivalent sales growth and a solid balance sheet.
Solid balance sheet, along with strong operational performance and the insurer’s outlook for growth in the future, has enabled it to hike its dividend payout. It targets a 35-45% dividend payout over the medium term. Its current dividend yield of 5.5% is higher than the industry average of 3.7%.
The Zacks Consensus Estimate for Reinsurance Group’s 2022 and 2023 earnings has moved 4.7% and 0.4% north, respectively, in the past 30 days. In the past year, Reinsurance Group stock has gained 29.8%.
The Zacks Consensus Estimate for RGA’s 2022 and 2023 earnings per share indicates a year-over-year increase of 1,224.7% and 3.4%, respectively.
The bottom line of W.R. Berkley surpassed earnings estimates in each of the last four quarters, the average beat being 25.63%. In the past year, the insurer has gained 37.3%.
The Zacks Consensus Estimate for W.R. Berkley’s 2022 and 2023 earnings has moved 5.1% and 3.4% north, respectively, in the past 60 days.
Root delivered a trailing four-quarter average earnings surprise of 22.44%. In the past year, ROOT has lost 91.5%.
The Zacks Consensus Estimate for ROOT’s 2022 and 2023 earnings indicates a respective year-over-year increase of 44.7% and 23.9%.
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Should You Hold Manulife Financial (MFC) in Your Portfolio?
Manulife Financial Corporation (MFC - Free Report) has been in investors' good books on the back of higher sales volumes, favorable product mix in individual insurance, higher investment income and financial flexibility.
Growth Projections
The Zacks Consensus Estimate for Manulife Financial’s 2023 earnings per share is pegged at $2.36, indicating a year-over-year increase of 3.9%. The expected long-term earnings growth rate is pegged at 10%.
Earnings Surprise History
Manulife Financial has a solid track record of beating earnings estimates in five of the last seven quarters.
Zacks Rank & Price Performance
Manulife Financial currently carries a Zacks Rank #3 (Hold). In the past year, the stock has lost 4.6% compared with the industry’s decline of 15%.
Image Source: Zacks Investment Research
Return on Equity
MFC’s trailing 12-month return on equity was 12.1%, which was better than the industry average of 11.5%, reflecting efficiency in utilizing shareholders’ fund.
Business Tailwinds
The life insurer stands to gain from three of its highest potential operating divisions, Asia, Canada and Global Wealth and Asset Management.
Courtesy of higher sales volumes, a favorable product mix in individual insurance in Canada and the favorable impact of product repricing in Hong Kong, business gains are expected to be higher.
The core earnings of Manulife Financial are likely to gain from higher new business gains along with solid net fee income from higher average assets under management and administration in the Global Wealth and Asset Management business. Higher investment income and double-digit in-force business growth in Canada and Asia should also add to the upside.
Manulife targeted an expense efficiency ratio of less than 50% or $1 billion in cost savings and avoidance by 2022. MFC expects $200 million of these savings in 2022. The life insurer estimates these businesses to generate about 67% of total company core earnings by 2022. The insurer remains focused on driving efficient growth and ensuring scalable growth, outstanding customer experience as well as digital ways of working.
Manulife has an impressive inorganic growth story. Acquisitions have helped Manulife add scale to its core business lines in Canada, including insurance, group benefits, group retirement and retail wealth, besides accelerating growth in Asia and consolidating its presence in the mid and large-case markets. Strategic buyouts also reflect the prudent use of capital in high-growth, less capital-intensive and higher-return businesses.
The life insurer boasts financial flexibility by virtue of solid growth in new business value, robust annualized premium equivalent sales growth and a solid balance sheet.
Solid balance sheet, along with strong operational performance and the insurer’s outlook for growth in the future, has enabled it to hike its dividend payout. It targets a 35-45% dividend payout over the medium term. Its current dividend yield of 5.5% is higher than the industry average of 3.7%.
Stocks to Consider
Some better-ranked stocks in the life insurance industry are Reinsurance Group of America, Incorporated (RGA - Free Report) , W.R. Berkley Corporation (WRB - Free Report) and Root, Inc. (ROOT - Free Report) , each carrying Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Reinsurance Group’s 2022 and 2023 earnings has moved 4.7% and 0.4% north, respectively, in the past 30 days. In the past year, Reinsurance Group stock has gained 29.8%.
The Zacks Consensus Estimate for RGA’s 2022 and 2023 earnings per share indicates a year-over-year increase of 1,224.7% and 3.4%, respectively.
The bottom line of W.R. Berkley surpassed earnings estimates in each of the last four quarters, the average beat being 25.63%. In the past year, the insurer has gained 37.3%.
The Zacks Consensus Estimate for W.R. Berkley’s 2022 and 2023 earnings has moved 5.1% and 3.4% north, respectively, in the past 60 days.
Root delivered a trailing four-quarter average earnings surprise of 22.44%. In the past year, ROOT has lost 91.5%.
The Zacks Consensus Estimate for ROOT’s 2022 and 2023 earnings indicates a respective year-over-year increase of 44.7% and 23.9%.