Their dividend hikes are on hold for now: Manulife and Sun Life

Article Excerpt

Due to the COVID-19 pandemic, Canadian financial regulators have instructed federally regulated firms, including Manulife and Sun Life, to postpone their planned dividend increases. However, it’s likely dividend hikes will resume some time later this year as the pandemic eases. MANULIFE FINANCIAL CORP. $26 is a buy. With the stock (Toronto symbol MFC; Conservative-Growth Payer Portfolio; Finance sector; Shares outstanding: 1.9 billion; Market cap: $49.4 billion; Dividend yield: 4.3%; Dividend Sustainability Rating: Above Average; www.manulife.ca), investors gain exposure to Canada’s largest life insurance provider. It also sells other forms of insurance, including health, dental and travel plans. In addition, the company offers mutual funds and investment management. As of December 31, 2020, Manulife managed $1.3 trillion in assets. With the March 2020 payment, the company handed investors a 12.0% dividend hike. The new annual rate of $1.12 a share provides a high 4.3% yield. In the latest quarter, dividends accounted for 38% of earnings, well within Manulife’s target range of 30% to 40%. In the fourth…