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Sun Life Financial Inc. (TSE:SLF)
TSX:SLF
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Sun Life Financial
(TSX:SLF)
75Outperform
Positive Factors
Business Model
SLF's Investor Day showcased a winning track record and increased confidence in its ability to accelerate growth due to its capital light/high growth business model.
Growth Strategy
SLC is at an inflection point, transitioning to a more coordinated platform to accelerate growth, with an objective of 20% underlying earnings growth.
International Expansion
In Asia, realizing the potential to build scale in countries like Indonesia, Vietnam, Malaysia, and China will help drive continued accelerated growth.
Negative Factors
Earnings Growth Expectations
In Canada, recent double-digit growth, strong digital capabilities, and a 20%+ ROE suggest the potential for higher growth than the expected 6% underlying earnings growth.
Sun Life Financial (SLF) vs. S&P 500 (SPY)
Market Cap
$44.97B
Dividend Yield4.26%
Average Volume (3M)2.46M
Price to Earnings (P/E)14.9
Beta (1Y)0.87
Revenue Growth-12.72%
EPS Growth-0.16%
CountryCA
Employees31,768
SectorFinancial
Sector Strength79
IndustryInsurance - Diversified
Share Statistics
EPS (TTM)5.26
Shares Outstanding572,857,540
10 Day Avg. Volume1,653,735
30 Day Avg. Volume2,462,013
Financial Highlights & Ratios
PEG Ratio1.38
Price to Book (P/B)N/A
Price to Sales (P/S)1.05
Price to Cash Flow (P/CF)19.00
P/FCF Ratio7.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$90.25Price Target Upside14.97% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
Sun Life Financial Business Overview & Revenue Model
Company DescriptionSun Life Financial Inc., a financial services company, provides insurance, wealth, and asset management solutions to individuals and corporate clients worldwide. It offers term and permanent life, as well as personal health, dental, critical illness, long-term care, and disability insurance products. The company also provides reinsurance products; investment counselling and portfolio management services; mutual funds and segregated funds; trust and banking services; real estate property brokerage and appraisal services; and merchant banking services. It distributes its products through direct sales agents, managing and independent general agents, financial intermediaries, broker-dealers, banks, pension and benefits consultants, and other third-party marketing organizations. The company was founded in 1871 and is headquartered in Toronto, Canada.
How the Company Makes MoneySun Life Financial generates revenue through multiple streams primarily centered around its insurance and asset management operations. The company earns premiums from its life and health insurance policies, which constitute a significant portion of its income. Additionally, Sun Life derives revenue from its investment management services, which include fees for managing assets and providing advisory services to individual and institutional clients. The company's earnings are further bolstered by its strategic partnerships and distribution agreements, which expand its market reach and client base. Investment income from its general account investments, consisting of bonds, equities, and real estate, also contributes to its financial results. Furthermore, Sun Life benefits from its diversified international operations, allowing it to capitalize on growth opportunities in various markets.
Sun Life Financial Financial Statement Overview
Summary
Sun Life Financial shows resilience with strong revenue growth and stable net income. However, the decrease in cash flows and the increasing debt-to-equity ratio highlight areas for potential improvement. The balance sheet remains robust, supporting the company's financial health, but cash flow management needs attention to ensure sustained growth.Income Statement
Sun Life Financial has demonstrated consistent revenue growth over the years, with a significant increase from $30.85 billion in 2023 to $36.80 billion in 2024. The net profit margin is stable, with net income remaining robust at approximately $3.17 billion. However, the absence of EBIT and EBITDA figures for 2024 limits the analysis of profitability efficiency.78
Positive
Balance Sheet
The company's balance sheet reflects a solid equity position with a debt-to-equity ratio that remains manageable, although it increased slightly to 0.58 in 2024. Equity ratio stands at 7.03%, indicating a relatively low proportion of equity financing compared to total assets. Despite this, Sun Life Financial maintains a strong asset base, which supports its financial stability.72
Positive
Cash Flow
The cash flow analysis shows a decline in operating cash flow from $5.61 billion in 2023 to $2.53 billion in 2024. The free cash flow decreased similarly, reflecting potential challenges in cash generation. The operating cash flow to net income ratio decreased, indicating less cash being generated from operations relative to net income.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 36.80B | 30.85B | 23.21B | 35.69B | 43.34B | Gross Profit |
| 36.80B | 32.66B | 23.21B | 35.69B | 43.34B | EBIT |
| 0.00 | 20.85B | 4.31B | 4.55B | 3.28B | EBITDA |
| 0.00 | 5.08B | 4.79B | 6.93B | 4.07B | Net Income Common Stockholders |
| 3.17B | 3.17B | 3.02B | 4.37B | 2.78B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 27.72B | 27.49B | 11.22B | 12.28B | 13.53B | Total Assets |
| 370.72B | 333.24B | 330.91B | 345.37B | 323.01B | Total Debt |
| 15.02B | 13.28B | 13.39B | 10.21B | 6.89B | Net Debt |
| 4.89B | 2.11B | 2.17B | -2.07B | -6.64B | Total Liabilities |
| 344.59B | 309.04B | 301.53B | 317.30B | 297.15B | Stockholders Equity |
| 26.05B | 23.58B | 27.45B | 26.31B | 24.47B |
| Cash Flow | Free Cash Flow | |||
| 2.39B | 5.44B | 8.00B | -1.94B | 7.09B | Operating Cash Flow |
| 2.53B | 5.61B | 4.31B | -1.86B | 7.25B | Investing Cash Flow |
| -337.00M | -559.00M | -2.86B | -803.00M | -886.00M | Financing Cash Flow |
| -3.88B | -3.09B | -71.00M | -260.00M | -2.31B |
Sun Life Financial Technical Analysis
Negative
78.50
Price Trends
80.37
Negative
82.26
Negative
77.11
Positive
Market Momentum
0.46
Negative
58.43
Neutral
62.69
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:SLF, the sentiment is Negative. The current price of 78.5 is below the 20-day moving average (MA) of 80.58, below the 50-day MA of 80.37, and above the 200-day MA of 77.11, indicating a neutral trend. The MACD of 0.46 indicates Negative momentum. The RSI at 58.43 is Neutral, neither overbought nor oversold. The STOCH value of 62.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:SLF.
Sun Life Financial Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $44.97B | 14.91 | 12.87% | 4.26% | -12.72% | -0.16% | |
75 Outperform | C$31.09B | 11.66 | 12.45% | 4.74% | -7.62% | 25.47% | |
73 Outperform | C$48.77B | 12.54 | 15.52% | 4.34% | -2.40% | 42.24% | |
70 Outperform | C$11.78B | 12.87 | 13.26% | 2.72% | -17.69% | 29.19% | |
64 Neutral | $13.46B | 9.44 | 9.34% | 4.72% | 16.14% | -8.80% |
* Financial Sector Average
Performance Comparison
TSE:SLF
Sun Life Financial
75.94
8.71
12.95%
MFC
Manulife Financial
27.30
5.06
22.75%
FRFHF
Fairfax Financial Holdings
1,387.01
326.29
30.76%
TSE:GWO
Great-West Lifeco
51.53
13.08
34.02%
TSE:IAG
iA Financial Corporation Inc
120.28
40.74
51.22%
TSE:POW
Power Corp of Canada
48.80
14.20
41.04%
Sun Life Financial Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: -6.25% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong capital generation, record fundraising at SLC, and significant growth in Asia, offset by challenges in U.S. stop-loss claims, negative net flows at MFS, and impairments in Vietnam. The company demonstrates resilience and strategic growth, but faces notable challenges in specific segments.Highlights
Strong Capital Position
Sun Life ended the quarter with a strong LICAT ratio of 152% and robust Holdco cash of $1.4 billion, indicating solid financial health and capacity for share buybacks.
Record Capital Raising at SLC Management
SLC Management achieved record capital raising of $10 billion in Q4, bringing the full year total to $24 billion, with net inflows over $14 billion.
Asia Growth Momentum
Sun Life's Asia operations saw strong growth, with underlying net income up 17% year-over-year to more than $700 million. Total Asia CSM grew by 30%.
Canada and U.S. Group Benefits Revenue Growth
Group Benefits revenue in Canada was up 11% year-over-year, and U.S. Group Benefits revenue grew 6% year-over-year, demonstrating strong core health business performance.
Digital Initiatives and Employee Engagement
Sun Life's digital initiatives, such as virtual care services in Canada and the Advisor Buddy tool in the Philippines, demonstrate commitment to innovation. Employee engagement scores averaged 88%, above industry norms.
Lowlights
U.S. Stop-Loss Morbidity Experience
The U.S. stop-loss morbidity claims experience was unfavorable due to increased severity, impacting underlying earnings. The full-year stop-loss loss ratio was 74%, above the 73% pricing target.
Negative Net Flows at MFS
Despite strong distribution execution, MFS experienced negative net flows, reflecting continued industry-wide outflows.
Vietnam Bancassurance Impairment
An impairment charge related to bancassurance agreements in Vietnam was recognized, due to market challenges and updated outlooks.
Lower U.S. Results
U.S. underlying net income was down 39% year-over-year, primarily driven by unfavorable morbidity experience in medical stop-loss.
Company Guidance
During the Sun Life Financial Q4 2024 earnings call, the company provided several key metrics and insights. Underlying net income for the fourth quarter was $965 million, a 2% decline year-over-year, with earnings per share flat at $1.68. The full-year underlying net income increased by 3% to $3.9 billion, with total assets under management reaching $1.54 trillion. The LICAT ratio at Sun Life Financial was reported at a strong 152%. In asset management, SLC Management achieved record capital raising of $10 billion in the quarter, contributing to a full-year total of $24 billion. MFS maintained strong long-term fund performance, with 95% of fund assets ranked in the top half of their respective Morningstar categories based on 10-year performance. Despite challenges in the U.S. due to increased claims severity in the stop-loss business, Sun Life reported positive momentum in its Canadian and U.S. group businesses. Wealth sales and asset management gross flows increased by 33%, driven by distribution execution at MFS and SLC. Sun Life also highlighted its commitment to digital innovation and employee engagement, with an employee engagement index score of 88%, maintaining a strong position in the financial services industry.Sun Life Financial Corporate Events
Financial Disclosures
Sun Life Financial Reports Mixed 2024 Results, Strong Growth in Key Segments
Neutral
Feb 12, 2025
Sun Life Financial Inc. reported a decline in underlying net income by 2% for the fourth quarter of 2024, although it saw a 3% increase for the full year, driven by strong performance in wealth and asset management. Despite a decrease in reported net income due to market conditions and impairment in their Vietnam operations, Sun Life experienced growth in assets under management and maintained a strong capital position, indicating a positive outlook for long-term growth.
Dividends
Sun Life Declares Q1 2025 Dividends
Positive
Feb 12, 2025
Sun Life Financial Inc. announced the declaration of dividends for Q1 2025 on both its common and preferred shares, maintaining the dividend amount consistent with the previous quarter. This announcement reflects Sun Life’s steady financial performance and its commitment to providing returns to its shareholders, indicating stable operations and potentially reinforcing investor confidence.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.