On Nov 15, 2016, we issued an updated research report on Manulife Financial Corp. (MFC - Free Report) .
Core earnings in the third quarter increased due to core investment gains, in-force and new business growth in Asia as well as improved policyholder experience. With respect to surprise trend, the Zacks Rank #3 (Hold) company posted better-than-expected earnings in two of the last four quarters with an average beat of 0.8%.
Manulife Financial continues to witness new business volumes, particularly in Asia. The life insurer is aggressively developing its business in Asia, which in turn, is delivering solid operational results. Notably, the Asia business now contributes one-third of the company’s earnings. This market is attractive owing to its changing demographics.
Manulife remains focused on expanding its wealth and asset management business around the world. Manulife Asset Management, the company’s investment division, now intends to expand its operations in Europe after having solidified its foothold in North America and Asia. Notably, the third quarter marked the 27th straight quarter of positive net flows at wealth and asset management.
Riding on its operational strength, Manulife boasts a strong capital position. The company has also been effectively lowering its leverage. A strong capital position has enabled the insurer to hike its dividend by 9% in Feb 2016, which was the third increase in less than two years.
However, low interest rates continue to weigh on the overall performance. Also, Foreign exchange volatility is a headwind. The Zacks Consensus Estimate for 2016 and 2017 declined by 2 cents each over the last 30 days to $1.35 and $1.56, respectively.
Nonetheless, the long-term earnings growth is currently pegged at 10.9%.
Stocks to Consider
Some better-ranked insurers are Health Insurance Innovations, Inc. (HIIQ - Free Report) , Primerica, Inc. (PRI - Free Report) , and Employers Holdings, Inc. (EIG - Free Report)
Health Insurance Innovations is a developer, distributor, and administrator of cloud-based individual health and family insurance plans as well as supplemental products in the U.S. the company delivered an average positive surprise of 270.8% in the last four quarters. The insurer has Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Primerica, a distributer of financial products to middle income households in the U.S. and Canada delivered average surprise of 6.37% in the last four quarters. The insurer has Zacks Rank #2 (Buy).
Employers Holdings is a commercial property and casualty insurance provider, primarily in the U.S. The company delivered average surprise of 27.32% in the last four quarters. The insurer has Zacks Rank #2.
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