This Dividend Duo Offers High Yields and Global Diversification — Here’s Why It Stands Out

Sun Life Financial Inc. and Manulife Financial Corp. are sound portfolio picks offering yields over 4% while remaining cheap despite significant share price gains.

Both these Canadian financial giants offer compelling reasons for investors to take notice, with their stocks posting steady gains in the past three years. Expanding footprints in Asia, particularly in Hong Kong, continue to drive earnings growth for both.

With attractive P/E valuations and yields of 4.2% and 4.3%, both companies have plenty to offer investors.

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

Manulife raised your quarterly dividend by 10.0% with the March 2025 payment. Investors received $0.44 a share instead of $0.40. The new annual rate of $1.76 yields 4.2%.

Its $5.4 billion reinsurance agreement in January 2025, along with an earlier one with the Reinsurance Group of America (RGA), has reduced Manulife’s long-term-care reserves by 18%. That releases as much as $800 million in capital for buybacks of up to 3% of outstanding shares.

The company’s earnings in the three months ended March 31, 2025, rose 3.3%, to $1.77 billion from $1.71 billion a year earlier. However, excluding currency rates, revenue fell 1%. Per share earnings gained 8.8%, to $0.99 from $0.91.

Its Canadian, Asian and Global Wealth and Asset Management businesses all expanded their earnings in the quarter; that offset weaker results in the U.S. due to higher credit losses and less-favourable actuarial methods and assumptions in 2024.

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Manulife’s assets under management and administration averaged $1.04 trillion in the first quarter, up 13% from a year earlier.

The stock trades at a low 10.3 times the company’s projected 2025 earnings of $4.07 a share.

Dividend hike projects financial strength

SUN LIFE FINANCIAL (Toronto symbol SLF; www.sunlife.ca) is Canada’s third-largest life insurance company by market cap after Manulife (No. 1) and Great-West Lifeco (No. 2). Sun Life has $1.52 trillion in assets under management and administration.

With the June 2025 payment, the company raised your quarterly dividend by 4.8%, to $0.88 a share from $0.84. The new annual rate of $3.52 yields a high 4.3%.

Sun Life’s revenue in the first quarter of 2025 gained 65.1%, to $11.35 billion from $6.88 billion a year earlier. That increase included $3.09 billion in investment portfolio gains. Earnings rose 19.4%, to $1.05 billion from $875 million a year earlier. Per-share earnings increased 21.3%, to $1.82 from $1.50 on fewer shares outstanding.

The company’s projected earnings in 2025 could rise 10% to $7.35 a share. The stock trades at a moderate 11.3 times that estimate.

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