Yahoo Finance Manulife (MFC) Rises 14% in Six Months: More Upside Left?
Manulife Financial Corporation’s MFC shares have gained 13.7% in the last six months, outperforming the industry’s increase of 5.7%. While the Finance sector has increased 4.9%, the Zacks S&P 500 composite has risen 9.8% in the same period. With a market capitalization of $34.3 billion, the average volume of shares traded in the last three months was about 3.5 million.
Strong Asia business, expanding Wealth and Asset Management business, and solid capital position continue to drive this Zacks Rank #3 (Hold) life insurer. Manulife, one of the three dominant life insurers in Canada, has a decent history of delivering earnings surprises in two of the last four reported quarters while missing in the other two.
Manulife’s ROE for the trailing 12 months is 13.1%, better than the industry average of 12.2%. This reflects Manulife’s efficiency in utilizing shareholders’ funds. It targets 13% ROE over the medium term.
The company has a VGM Score of B.
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Can it Retain the Bull Run?
The Zacks Consensus Estimate for 2023 earnings stands at $2.42, suggesting an increase of 1.7% on 7.8% higher revenues of $44.3 billion. The consensus estimate for 2024 earnings stands at $2.69, suggesting an increase of 11.1% on 0.5% higher revenues of $44.5 billion.
While its earnings have grown 6.2% over the last five years, outperforming the industry average of 2.6%, the long-term earnings growth rate is currently pegged at 10%. Manulife targets core EPS growth between 10% and 12% over the medium term.
The Zacks Consensus Estimate for MFC’s 2023 and 2024 earnings has moved 0.4% and 3.1% north, respectively, in the past seven days, reflecting analysts’ optimism.
Manulife’s Asia business contributes significantly to its earnings, thus remaining focused to expand in Asia.
MFC is also expanding the Wealth and Asset Management business and has identified Europe (and the wider EMEA market) as a significant growth area and is making long-term investments in this region. The life insurer remains focused on accelerating growth in the highest potential businesses and targets two-thirds of core earnings from these businesses.
It boasts an impressive inorganic growth story with prudent use of capital in high-growth, less capital-intensive, higher-return businesses. Banking on its solid financial position, the company is well poised to ramp up its inorganic growth profile.
In sync with the industry trend, Manulife invested $1 billion since 2018 to enhance digital capabilities.
The company’s sturdy capital position supports effective capital deployment. MFC has increased its dividend at a six-year CAGR of 10%. It targets a 35-45% dividend payout over the medium term.
The life insurer also bought back $1.9 billion worth of shares in 2022. MFC targets a leverage ratio of 25% and a 30-40% dividend payout over the medium term.
Stocks to Consider
Some better-ranked stocks from the insurance industry are Primerica PRI, Voya Financial VOYA, and Brighthouse Financial BHF.
Primerica’s earnings surpassed the Zacks Consensus Estimate in two of the last four quarters. PRI sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for PRI’s 2023 and 2024 earnings per share indicates year-over-year increases of 18.3% and 8.9%, respectively. Year to date, PRI shares gained 18.5%.
Voya Financial’s earnings surpassed the Zacks Consensus Estimate in all the last four quarters, the average earnings surprise being 38.68%. VOYA carries Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for VOYA’s 2023 and 2024 earnings per share indicates year-over-year increases of 6.1% and 14%, respectively. Year to date, VOYA shares gained 16.3%.
Brighthouse Financial’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters, the average beat being 2.07%. BHF carries Zacks Rank #2.
The Zacks Consensus Estimate for BHF’s 2023 and 2024 earnings per share indicates year-over-year increases of 29.4% and 12.6%, respectively. Year to date, BHF shares lost 17.3%.
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Manulife Financial Corp (MFC) : Free Stock Analysis Report
Primerica, Inc. (PRI) : Free Stock Analysis Report
Voya Financial, Inc. (VOYA) : Free Stock Analysis Report
Brighthouse Financial, Inc. (BHF) : Free Stock Analysis Report
