Manulife Financial Corporation MFC has been on the good books of investors with higher average assets under management and administration, strong operations in Asia and strong capital position.
Zacks’ consensus estimate for Manulife Financial’s earnings per share in 2022 is set at $ 2.85, which indicates a 9.96% year-over-year increase.
Estimates for 2022 have risen nearly 0.7% in the past 60 days, reflecting investor optimism.
History of surprise earnings
Manulife Financial has a history of surprisingly decent earnings. Its profits have exceeded estimates in three of the past four quarters and have missed the same in one, averaging 4.5%.
Zacks Ranking and Price Performance
Manulife Financial currently holds a Zacks Rank # 3 (Hold). Over the past year, the stock has climbed 6.2%, outperforming industry growth of 3.1%.
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Business tail winds
The life insurer remained focused on three of its operating divisions with the highest potential – Asia, Canada and Global Wealth and Asset Management (“WAM”).
Due to the growth in net commissions driven by the increase in average assets under management and under administration due to the favorable impact of the markets, as well as net inflows and a favorable business mix, the Global business WAM should continue to improve over the long term.
Growth in in-force business and favorable product lineup, favorable policyholder experience and higher new business earnings should continue to drive Manulife Financial’s business in Asia.
Business in Canada is likely to benefit from the favorable experience of individual policyholders, higher in-force revenues from retail insurance products and the one-time occurrence of a number of smaller adverse items related to to the experience.
Manulife Financial remains focused on growing core EPS of 10% to 12% over the medium term.
In November 2021, a subsidiary of Manulife entered into an annuity reinsurance transaction with Venerable Holdings Inc., where it will reinsure approximately 76% of its former US variable annuity (“VA”) block to the Venerable subsidiary. The transaction is expected to reduce the total net amount of US VA at risk as well as the equity sensitivities of the variable annuity guarantees. Manulife estimates a capital release of $ 2 billion as a result of the deal, with which it intends to increase the proposed share buyback.
The life insurer prides itself on financial flexibility due to solid growth in new business value, strong annualized growth in premium matched sales and a strong balance sheet. Taking advantage of the increase in retained earnings and the favorable impact of a weaker Canadian dollar, financial leverage improved, reflecting continued financial flexibility. MFC is targeting a leverage ratio of 25% and remains committed to a payout ratio of 30% to 40%.
The expense efficiency ratio improved as core profit growth outpaced core expense growth. Manulife remains committed to achieving a spend efficiency ratio of less than 50% by 2022.
Actions to consider
Some top-ranked stocks in the life insurance industry include American Equities Investissement Vie Holding AEL, Athens ATH and Sun Life Financial SLF. While US stocks have a Zacks # 1 (strong buy) rank, Athene and Sun Life Financial have a Zacks # 2 (buy) rank. You can see the full list of today’s Zacks # 1 Rank stocks here.
American Equity profits have beaten estimates in two of the past four quarters and missed the other two, averaging 31.49%.
Over the past year, AEL has gained 40.9%. Zacks’ consensus estimate for 2022 profits has moved 5.7% north in the past 60 days.
Athene delivered an average four-quarter surprise profit of 46.12%. Over the past year, the stock has gained 93.9%.
Athene has an impressive value score of A which reflects the attractive valuation of the stock. ATH has a favorable VGM score of B. The VGM score helps identify stocks with the most compelling value, the best growth, and the most promising momentum.
Zacks’ consensus estimate for Sun Life Financial’s earnings in 2022 implies year-over-year growth of 9.09%. The SLF made a surprise profit of 7.74% on average over four quarters.
Over the past year, Sun Life Financial has gained 23.7%. SLF’s expected long-term earnings growth rate is 9%. SLF has an impressive value score of A which reflects the attractive valuation of the stock.
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Manulife Financial (MFC): Free Stock Analysis Report
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