Manulife among top financial stocks to buy

Despite falling short of analysts’ expectations, core earnings are still impressive. Manulife Financial Corporation is a Canadian global financial stock to buy for growth and some income.

Manulife Financial Corporation (TSX─MFC) has reported second-quarter core earnings per share, or EPS, that were a penny short of analysts’ expectations. EPS was $0.44, compared with the consensus analyst estimate of $0.45. Despite this, core earnings were still up a considerable 29 per cent from the same quarter last year.

The strong core earnings, according to the company’s chief financial officer, Steve Roder, demonstrate this full financial services provider’s increased scale in its wealth and asset management businesses, strong insurance growth in Asia, and successful efficiency initiatives.

Manulife is Canada’s largest life insurance company with principal operations in Asia, Canada and the U.S.

Strong Q2 results follow decent Q1 performance

The company’s strong second-quarter results have followed a decent first-quarter performance. Consequently, core earnings are up nearly 20 per cent on a year-to-date basis. For the six months ended June 30, 2015, Manulife’s core earnings were $1.7 billion, or $0.83 a share, compared with $1.4 billion, or $0.73 a share, in the same period of 2014.

Some of this increase is related to recent acquisitions as well as higher fee income on higher asset levels in the company’s wealth and asset management businesses, strong insurance sales in Asia and the stronger U.S. dollar.

Manulife among top Canadian blue chip dividend stocks

Profit momentum has let Manulife recently increase its quarterly dividend to $0.17 a share from $0.155.

Manulife should continue to find ways to grow its business. For example, the company has become the first foreign-invested life insurance company in mainland China to be granted a licence to sell mutual fund products through its agency force.

The stock trades at an attractive multiple of the $1.79 a share Manulife will likely earn in 2015. Its current annual dividend of $0.68 a share yields over 3 per cent.

Manulife Financial is a global Canadian financial stock to buy for continuing growth and some income.

 

Money Reporter, MPL Communications Inc.
133 Richmond St. W., Toronto, On, M5H 3M8, 1-800-804-8846