Sun Life & Manulife Financial Pay 4.1% and 4.2 Dividend Yield

Two of Canada’s largest insurers, Sun Life Financial and Manulife Financial, are well-positioned for significant growth with ongoing earnings increases. In the past few years, both firms have expanded operations in Asia including China, Hong Kong, India, Indonesia, Malaysia, the Philippines, Singapore and Vietnam.

Both companies also continue to benefit from the aging North American population and rising demand for health insurance and wealth management services.

We expect these factors to drive the company’s earnings—and your dividend—over the next several years. The valuations make them especially attractive: one stock trades at just 10.2 times its forward earnings forecast and the other at 10.6 times its own estimate.

MANULIFE FINANCIAL (Toronto symbol MFC; www.manulife.ca) is Canada’s largest life insurer. It’s also a leading insurer in Vietnam, Cambodia, Singapore, and the Philippines.

The company also sells other forms of insurance besides life insurance, including health, dental and travel plans; Manulife’s mutual funds and investment management services further diversify its revenue stream.

In the quarter ended December 31, 2024, earnings rose 7.6%, to $1.91 billion from $1.77 billion. Due to fewer shares outstanding, per-share earnings gained 12.0%, to $1.03 from $0.92. That gain was due to stronger earnings at its Canadian, Asian and Global Wealth and Asset Management businesses; they were only partly offset by weaker results in the U.S.

Manulife plans to continue its share buyback program as it keeps divesting from lower-growth assets.

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For instance, in February 2024, the company completed a new long-term care (LTC) reinsurance transaction with insurer Global Atlantic. In April 2024, it closed a second reinsurance transaction, this time with RGA Canada.

The moves freed up $2.0 billion in capital, which Manulife plans to keep returning to shareholders through share repurchases. It, in fact, bought back $3.3 billion of its stock in 2024.

The stock trades at a moderate 10.2 times the $4.18 a share it’s forecast to make in 2025.

Manulife is raising your quarterly dividend by 10.0% with the March 2025 payment. Investors will receive $0.44 a share instead of $0.40. The new annual rate of $1.76 yields 4.1%.

Dividend Stocks: Another high yield for safety- and income-focused investors

SUN LIFE FINANCIAL (Toronto symbol SLF; www.sunlife.ca) sells life coverage, savings, retirement and pension products. It operates in Canada, the U.S., Asia and the U.K. and has $1.54 trillion in assets under management.

The company’s per-share earnings in the quarter ended December 31, 2024, were unchanged at $1.68.

Sun Life recently announced a new three-year partnership with Tribal Wi-Chi-Way-Win Capital Corporation (TWCC) to provide Contact Centre services for the Canadian Dental Care Plan. TWCC is owned by five Manitoba Tribal Councils and several independent Manitoba First Nations. It provides business services and customer care solutions to clients across Canada. This deal will help Sun Life cross-sell additional products to this group.

The company’s earnings should rise 13.2%, from $6.66 a share in 2024 to $7.54 in 2025. The stock trades at a moderate 10.6 times that 2025 estimate. The shares yield a high 4.2%.

Recommendation in Dividend Advisor: Sun Life Financial Inc. and Manulife Financial Corp. are buys.

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Jim Bates

Jim is an associate editor at TSI Network. He is the lead reporter and analyst for The Successful Investor and Wall Street Stock Forecaster and a member of the Investment Planning Committee. Jim has held the Chartered Financial Analyst designation since 1992 and spent more than a decade at the Financial Post DataGroup before joining TSI Network. He has a Bachelor of Commerce degree from the University of Toronto.

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