Updating your Conservative-Growth Payers: Manulife Financial

Article Excerpt

MANULIFE FINANCIAL CORP. $33 is a buy. The company (Toronto symbol MFC; Conservative-Growth Payer Portfolio; Finance sector; Shares outstanding: 1.8 billion; Market cap: $59.4 billion; Dividend yield: 4.8%; Dividend Sustainability Rating: Above Average; www.manulife.ca) is Canada’s largest life insurer. It also sells other forms of insurance, including health, dental and travel plans; its mutual funds and investment management services further diversify its revenue stream. The company is also a leading insurer in Vietnam, Cambodia, Singapore, and the Philippines. Manulife raised its quarterly dividend by 9.6% with the March 2024 payment. Investors now receive $0.40 a share instead of $0.365. The new annual rate of $1.60 yields a high 4.8%. In December 2023, the company announced a new long-term care (LTC) reinsurance transaction with insurer Global Atlantic. It will reinsure $13 billion in existing Manulife LTC coverage, including $6 billion (14%) of its U.S. LTC reserves. The move frees up $1.2 billion in capital, which Manulife plans to return to shareholders through share repurchases. As well, in the…