MANULIFE FINANCIAL $21.67 (Toronto symbol MFC; Shares outstanding: 1.9 billion; Market cap: $40.2 billion; TSINetwork Rating: Above Average; Dividend yield: 2.4%; www.manulife.ca) sells life and other forms of insurance, as well as mutual funds and investment management services. The company operates globally and has $635 billion of assets under management.
In the three months ended March 31, 2014, Manulife’s earnings per share rose 15.6%, to $0.37 from $0.32 a year earlier. Revenue gained 2.1%, to $9.0 billion from $8.8 billion, as its assets under management grew and its foreign operations benefited from favourable currency movements.
Manulife has made substantial progress cutting its U.S. insurance business’s exposure to unpredictable stock markets and interest rates.
At the same time, the company continues to steadily increase its market share in Asia. Right now, about a third of Manulife’s insurance premiums come from its operations in Japan, China, Hong Kong, Thailand, Malaysia, Indonesia, Singapore and the Philippines.
The stock has moved up 20% over the past year; it now trades at just 12.3 times Manulife’s latest 12 months of earnings. The company’s long-term outlook is positive, but it depends on its U.S. operations for about half of its earnings (as opposed to Sun Life’s 30%). That means the sluggish U.S. economic recovery could slow its growth.
Manulife is a hold.
