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Sun Life (SLF) Set to Grow on Buyouts, Asset Management
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On Jun 13, 2016, we issued an updated research report on Sun Life Financial Inc. (SLF - Free Report) .
Sun Life’s first-quarter earnings improved year over year on the strength of its U.S. and Asian business. Its asset management business also continued to perform well. Moreover, favorable forex added to the upside. With respect to earnings surprise, this Zacks Rank #2 (Buy) life insurer delivered positive surprises in three of the last four quarters, with an average beat of 9.3%.
Sun Life is aggressively expanding its international presence. To that end, the company is considering strategic investments and acquisitions in emerging markets. In Jan 2016, Sun Life increased its stake in PVI Sun Life to 75% from 49% to expedite growth in Vietnam. Then, in April, Sun Life increased its stake in Birla Sun Life Insurance Company Limited in India to 49% from 26%. This transaction will help it to consolidate its operations in India. Sun Life will also acquire the remaining 51% stake in PT CIMB Sun Life to solidify its Indonesian presence.
Sun Life acquired the employee benefits business of Assurant Inc (AIZ - Free Report) and now has the leading dental business and provider network. Sun Life is now the sixth-largest group benefits’ business in the U.S.
Moreover, Sun Life is expanding its Global Asset Management Business, which has been witnessing a growing asset base for the past many quarters. In 2015, the company announced the creation of a new third-party asset management business – Sun Life Investment Management – to foster its investment capabilities from private fixed income, mortgages and real estate to pension plans and other institutional investors. Sun Life targets Sun Life Investment Management asset under management of $100 billion over the next five years.
A sustained solid operational performance has aided the company to strengthen its balance sheet. Riding on this strength, Sun Life raised its dividend by 8% this year. The company targets dividend payout between 40% and 50% over the longer term.
However, low interest rates are weighing on investment results and high hedging costs are hurting earnings. Also, escalating expenses are limiting margin expansion.
Nonetheless, riding on the positives, the Zacks Consensus Estimate climbed in the last 60 days by 3% to $2.74 for 2016 and 3.1% to $3.00 for 2017.
Other Stocks to Consider
Investors interested in life insurers can also take a look at GWG Holdings, Inc. , and Manulife Financial Corporation (MFC - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
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Sun Life (SLF) Set to Grow on Buyouts, Asset Management
On Jun 13, 2016, we issued an updated research report on Sun Life Financial Inc. (SLF - Free Report) .
Sun Life’s first-quarter earnings improved year over year on the strength of its U.S. and Asian business. Its asset management business also continued to perform well. Moreover, favorable forex added to the upside. With respect to earnings surprise, this Zacks Rank #2 (Buy) life insurer delivered positive surprises in three of the last four quarters, with an average beat of 9.3%.
Sun Life is aggressively expanding its international presence. To that end, the company is considering strategic investments and acquisitions in emerging markets. In Jan 2016, Sun Life increased its stake in PVI Sun Life to 75% from 49% to expedite growth in Vietnam. Then, in April, Sun Life increased its stake in Birla Sun Life Insurance Company Limited in India to 49% from 26%. This transaction will help it to consolidate its operations in India. Sun Life will also acquire the remaining 51% stake in PT CIMB Sun Life to solidify its Indonesian presence.
Sun Life acquired the employee benefits business of Assurant Inc (AIZ - Free Report) and now has the leading dental business and provider network. Sun Life is now the sixth-largest group benefits’ business in the U.S.
Moreover, Sun Life is expanding its Global Asset Management Business, which has been witnessing a growing asset base for the past many quarters. In 2015, the company announced the creation of a new third-party asset management business – Sun Life Investment Management – to foster its investment capabilities from private fixed income, mortgages and real estate to pension plans and other institutional investors. Sun Life targets Sun Life Investment Management asset under management of $100 billion over the next five years.
A sustained solid operational performance has aided the company to strengthen its balance sheet. Riding on this strength, Sun Life raised its dividend by 8% this year. The company targets dividend payout between 40% and 50% over the longer term.
However, low interest rates are weighing on investment results and high hedging costs are hurting earnings. Also, escalating expenses are limiting margin expansion.
Nonetheless, riding on the positives, the Zacks Consensus Estimate climbed in the last 60 days by 3% to $2.74 for 2016 and 3.1% to $3.00 for 2017.
Other Stocks to Consider
Investors interested in life insurers can also take a look at GWG Holdings, Inc. , and Manulife Financial Corporation (MFC - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>