Top Canadian insurers with gains ahead

Article Excerpt

Insurers write policies, collect premiums from customers, and then invest those premiums to meet future claims. They’re required to invest significant amounts of that money in fixed-income instruments, namely bonds. That means high interest rates are a boon to their returns. Both these stocks offer investors growth prospects as well as high dividend yields. We see each as a buy. MANULIFE FINANCIAL, $24.63, is a buy. This safety-conscious blue-chip company (Toronto symbol MFC; Shares o/s: 1.9 billion; Market cap: $45.9 billion; TSINetwork Rating: Above Average; Yield: 5.4%; www.manulife.ca) is one of Canada’s largest life insurers. The company also sells other forms of insurance including health, dental and travel plans; its mutual funds and investment management services further diversify its revenue stream. On September 30, 2022, it had $1.3 trillion in assets under administration. Increasingly, markets outside of Canada—especially Asia (39% of earnings)—contribute to growth­. In the quarter ended September 30, 2022, earnings before one-time items fell 12.9%, to $1.32 billion, or $0.67 a share, from $1.52 billion,…