Expect higher dividends from these insurers

Article Excerpt

COVID-19 lockdowns in Asia have hurt earnings at these top insurance companies. However, they should benefit from rising interest rates as they invest premiums from customers in higher-yielding bonds. That puts them in a good position to reward investors with future dividend hikes. MANULIFE FINANCIAL CORP. $22 is a buy. The company (Toronto symbol MFC; Conservative-Growth Payer Portfolio; Finance sector; Shares outstanding: 1.9 billion; Market cap: $41.8 billion; Dividend yield: 6.0%; Dividend Sustainability Rating: Above Average; www.manulife.ca) is Canada’s largest life insurer. It also sells other forms of insurance, including health, dental and travel plans; its mutual funds and investment management services further diversify its revenue stream. The company last raised its quarterly dividend with the December 2021 payment. Investors now receive $0.33 a share, up 17.9% from $0.28. The new annual dividend rate of $1.32 yields a high 6.0%. Manulife also increased its dividend payout ratio target, from between 30% and 40% to between 35% and 45%. In the quarter ended March 31, 2022, the payout…

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