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Why Is Sun Life (SLF) Down 6.7% Since Last Earnings Report?
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A month has gone by since the last earnings report for Sun Life (SLF - Free Report) . Shares have lost about 6.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Sun Life due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Sun Life Q4 Earnings Top, Insurance Sales Rise Y/Y
Sun Life Financial delivered fourth-quarter 2022 underlying net income of $1.25 per share, beating the Zacks Consensus Estimate by 7.8%. The bottom line increased 3.3% year over year. The underlying net income of $729 million (C$990 million) was up 10% year over year driven by earnings growth in the United States and Canada.
Insurance sales increased 14.8% year over year to $1.3 billion (C$1.8 billion), driven by increased sales in Canada, Asia and the United States.
Wealth sales were $33.6 billion (C$45.6 billion), down 17% year over year. The value of new business decreased 5.3% to $345 million (C$468 million).
Segment Results
SLF Canada’s underlying net income increased 22% year over year to $239 million (C$324 million), driven by experience-related items and higher investment-related earnings.
SLF U.S.’ underlying net income was $177 million (C$240 million), up 77.5% from the prior-year quarter. The increase was driven by growth across all businesses, contribution from the DentaQuest acquisition and favorable experience-related items.
SLF Asset Management’s underlying net income of $231 million (C$313 million) declined 18% year over year. The decrease was attributable to lower results in MFS, largely reflecting declines in global equity markets, which resulted in lower average net assets.
SLF Asia reported an underlying net income of $112 million (C$152 million), which rose 17% year over year. The increase was driven by business growth and experience in protection and health, including improved mortality compared to the prior year, which included COVID-related claims, partially offset by lower fee-based income, reflecting equity market declines.
Financial Update
Global assets under management were $978.9 billion (C$1,326 billion), down 8.2% year over year.
Sun Life Assurance’s Minimum Continuing Capital and Surplus Requirements (LICAT) ratio was 127% as of Dec 31, 2022, up 300 basis points (bps) year over year.
The LICAT ratio for Sun Life (including cash and other liquid assets) was 130% as of Dec 31, 2022, down 1500 basis points (bps) year over year
Sun Life’s return on equity was 12.5% in 2022, down 460 bps year over year. The underlying return on equity of 15.1% contracted 40 basis points year over year. The leverage ratio of 25.1% improved 40 bps year over year.
Dividend Update
On Feb 8, the company’s board of directors approved a dividend of 72 cents per share. The amount will be paid out on Mar 31, 2023 to shareholders of record at the close of business on Mar 1.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
VGM Scores
Currently, Sun Life has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Sun Life has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is Sun Life (SLF) Down 6.7% Since Last Earnings Report?
A month has gone by since the last earnings report for Sun Life (SLF - Free Report) . Shares have lost about 6.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Sun Life due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Sun Life Q4 Earnings Top, Insurance Sales Rise Y/Y
Sun Life Financial delivered fourth-quarter 2022 underlying net income of $1.25 per share, beating the Zacks Consensus Estimate by 7.8%. The bottom line increased 3.3% year over year. The underlying net income of $729 million (C$990 million) was up 10% year over year driven by earnings growth in the United States and Canada.
Insurance sales increased 14.8% year over year to $1.3 billion (C$1.8 billion), driven by increased sales in Canada, Asia and the United States.
Wealth sales were $33.6 billion (C$45.6 billion), down 17% year over year. The value of new business decreased 5.3% to $345 million (C$468 million).
Segment Results
SLF Canada’s underlying net income increased 22% year over year to $239 million (C$324 million), driven by experience-related items and higher investment-related earnings.
SLF U.S.’ underlying net income was $177 million (C$240 million), up 77.5% from the prior-year quarter. The increase was driven by growth across all businesses, contribution from the DentaQuest acquisition and favorable experience-related items.
SLF Asset Management’s underlying net income of $231 million (C$313 million) declined 18% year over year. The decrease was attributable to lower results in MFS, largely reflecting declines in global equity markets, which resulted in lower average net assets.
SLF Asia reported an underlying net income of $112 million (C$152 million), which rose 17% year over year. The increase was driven by business growth and experience in protection and health, including improved mortality compared to the prior year, which included COVID-related claims, partially offset by lower fee-based income, reflecting equity market declines.
Financial Update
Global assets under management were $978.9 billion (C$1,326 billion), down 8.2% year over year.
Sun Life Assurance’s Minimum Continuing Capital and Surplus Requirements (LICAT) ratio was 127% as of Dec 31, 2022, up 300 basis points (bps) year over year.
The LICAT ratio for Sun Life (including cash and other liquid assets) was 130% as of Dec 31, 2022, down 1500 basis points (bps) year over year
Sun Life’s return on equity was 12.5% in 2022, down 460 bps year over year. The underlying return on equity of 15.1% contracted 40 basis points year over year. The leverage ratio of 25.1% improved 40 bps year over year.
Dividend Update
On Feb 8, the company’s board of directors approved a dividend of 72 cents per share. The amount will be paid out on Mar 31, 2023 to shareholders of record at the close of business on Mar 1.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
VGM Scores
Currently, Sun Life has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Sun Life has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.