Two Canadian insurers spurred by Asia

Article Excerpt

Insurers write policies, collect premiums from customers, and then invest those premiums to meet future claims. That need to cover claims means they invest significant amounts of their funds in fixed-income instruments, namely bonds. That also means high interest rates are a boon to their returns. Both these insurance stocks offer investors growth prospects as well as high dividend yields. We see each as a buy. MANULIFE FINANCIAL, $24.31, is a buy. This safety-conscious blue-chip company (Toronto symbol MFC; Shares o/s: 1.8 billion; Market cap: $44.2 billion; TSINetwork Rating: Above Average; Yield: 6.0%; is one of Canada’s largest life insurers. The company also sells other forms of insurance including health, dental and travel plans; Manulife’s mutual funds and investment management services further diversify its revenue stream. On June 30, 2023, the insurer had $1.34 trillion in assets under administration. Markets outside of Canada—especially Asia (30% of earnings)—increasingly contribute to Manulife’s growth­. In the quarter ended June 30, 2023, per-share earnings rose 9.2%, to $0.83 from $0.76….