Investors continue to pour cash into Manulife Financial Corporation (MFC), the largest insurance company in Canada, while it overcomes volatility in its sector and rebounds from the 2020 stock market crash. Stockholders have enjoyed a stable dividend rise, and while Manulife offers a generous 4.49% dividend, it is the upward recovery and rapid pace of the company’s expansion into Asia that have raised the stock 31% year-over-year as earnings grew in 2019 and 2020.
Manulife grabs the attention of many investors who give more consideration to high-volume stocks. With an average volume of 8.76 million and a three-month average 3.1 million, analysts are bearish on Manulife now. (See Manulife stock analysis on TipRanks)
The stock’s wild rally to a towering 86.4% a year after the world economy began to unravel in March 2020 is nothing short of remarkable.
An Eye on Asia
The company is well-diversified in Canada, the U.S., and Asia. Focusing on insurance, mutual funds, GICs, mortgage and other financial services, the 20th largest company in Canada looks beyond its North American borders to the booming Asian market.
High-quality growth did not simply fall from the sky for Manulife. Impressive research aimed at not only understanding the Asian market, but investing in its ability, has defined the company over the past several years. Its most recent version of the Manulife Asia Care Survey, and significantly, its Manulife Business Academy, highlight the deep strategic push towards its Asian consumer base.
With approximately one-third of total revenue coming from Asia, Manulife has 10 exclusive bank partners in Asia that provide access to over 30 million customers. In 2020, the company increased its agency force in Asia by a record 21%. The number of Manulife agents who are members of the Million Dollar Round Table (MDRT), a global body of 72,000 life insurance and financial professionals, had grown to around 3,600 in 2019 and is expected to increase in 2021, the company said in a recent press release.
What To Expect in 2021?
Among the long-term investors who stayed bullish in the stock, one key factor continues to confirm why Manulife makes sense — it is considered one of the best Canadian dividend stocks. With the upcoming dividend payout slated for June 21, 2021, shareholders will receive a dividend of C$0.28 per share, which represents a payout ratio of 41.95% and an annual dividend of C$1.12.
APE sales are up 14% in Q1 2021 year-over-year, while Manulife’s net income rose to C$783 million but was down $513 million year-over-year. Its increase in Q1 2021 core earnings to C$1.6 billion marked a 67% increase year-over-year.
“We delivered very strong operating results in the first quarter of 2021, driven by double-digit growth in core earnings across all of our operating segments,” said Manulife President & CEO Roy Gori.
Analysts’ Take on MFC Stock
According to TipRanks’ analyst rating, MFC stock is a Moderate Buy, with 4 Buys and 3 Holds.
The average analyst Manulife price target is C$30.05 per share, with a potential low of C$27.03 and a high of C$40.15 per share.
Bottom Line
Manulife is a value-based stock with an ambitious growth strategy. Investors will likely continue to buy and hold as they watch the company develop its geographic franchise under strong leadership, with a strong foundation in North America and a solid vision in Asia.
The company’s capital utilization has continued to impress investors and the stock price continues to trend positively. Meanwhile, the stock is trading relatively low compared to peers.
TipRank investors’ sentiment continues to be very positive about Manulife. Despite the recent downturn since its last earnings report on May 5, 2021 and and its underperformance in all major indexes, the momentum of growth and profit is expected to insulate the company’s potential choppy waters.
Disclosure: Lukas Brenowitz held no position in any of the stocks mentioned in this article at the time of publication.
Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities.
