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Manulife Financial (TSE:MFC)
:MFC
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Manulife Financial
(NYSE:MFC)
75Outperform
Positive Factors
Shareholder Returns
A 10% increase in quarterly dividend and a refreshed share buyback program aim to reward shareholders.
Value of New Business
4Q24 value of new business (VNB) rose 31% year-over-year, surpassing expected growth, with strong performance across Asia.
Negative Factors
Earnings Outlook
Earnings for FY24/25F are cut by 11%/7% to factor in the reinsurance transaction impact and weak alternative investment performance.
Manulife Financial (MFC) vs. S&P 500 (SPY)
Market Cap
C$71.15B
Dividend Yield4.09%
Average Volume (3M)9.33M
Price to Earnings (P/E)14.4
Beta (1Y)1.25
Revenue Growth7.64%
EPS Growth9.22%
CountryCA
Employees38,000
SectorFinancial
Sector Strength77
IndustryInsurance
Share Statistics
EPS (TTM)2.86
Shares Outstanding1,723,170,000
10 Day Avg. Volume11,833,296
30 Day Avg. Volume9,325,926
Financial Highlights & Ratios
PEG Ratio1.57
Price to Book (P/B)N/A
Price to Sales (P/S)0.93
Price to Cash Flow (P/CF)2.50
P/FCF Ratio1.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$50.53Price Target Upside20.14% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
Manulife Financial Business Overview & Revenue Model
Company DescriptionCanada-based Manulife Financial Corp. is a financial services company, which provides financial advice, insurance and wealth and asset management products and services in Asia, Canada, the United States, and other international markets.
How the Company Makes MoneyManulife Financial makes money through various revenue streams primarily centered around its insurance and wealth and asset management businesses. In its insurance segment, the company generates revenue from the premiums paid by policyholders for life, health, and long-term care insurance products. The wealth and asset management segment earns revenue through management and advisory fees from mutual funds, pension plans, and institutional investment products. Manulife also benefits from investment income generated from its significant general fund assets. Additionally, strategic partnerships and collaborations with financial institutions and distribution networks enhance its market reach and contribute to its earnings growth.
Manulife Financial Financial Statement Overview
Summary
Manulife Financial demonstrates strong financial performance with a stable balance sheet, robust cash flow, and profitability despite revenue decline. The company effectively manages leverage, but needs to focus on revenue growth and liability changes.Income Statement
The income statement shows mixed results with a declining revenue trend from 2019 to 2024. Gross profit margin remains stable as total revenue equals gross profit. While EBIT margin is variable and dropped to zero in 2024, the EBITDA margin improved, reflecting cost management efficiencies. Net profit margin remains positive, indicating profitability despite revenue fluctuations.70
Positive
Balance Sheet
Manulife Financial demonstrates a solid balance sheet with a strong equity base. The debt-to-equity ratio is low, indicating manageable leverage. The equity ratio shows stability with sufficient equity to cover total assets. However, fluctuations in total liabilities suggest potential risks that need monitoring.75
Positive
Cash Flow
The cash flow analysis reveals a robust free cash flow, reflecting strong operational cash generation. The operating cash flow to net income ratio is favorable, indicating efficient cash conversion. Free cash flow growth is notable, although the trend of free cash flow to net income ratio requires close observation in future periods.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 45.58B | 50.33B | 15.28B | 59.84B | 77.12B | Gross Profit |
| 45.58B | 36.44B | 15.28B | 59.84B | 77.12B | EBIT |
| 0.00 | 9.45B | 10.10B | 5.44B | 3.65B | EBITDA |
| 7.26B | 8.59B | -1.57B | 9.66B | 8.61B | Net Income Common Stockholders |
| 5.63B | 5.46B | -2.10B | 6.66B | 5.33B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 25.79B | 20.34B | 19.15B | 22.59B | 26.17B | Total Assets |
| 978.82B | 875.57B | 848.94B | 917.64B | 880.35B | Total Debt |
| 14.16B | 12.74B | 12.36B | 11.86B | 13.99B | Net Debt |
| -11.63B | -1.44B | -6.80B | -10.73B | -12.17B | Total Liabilities |
| 925.86B | 826.85B | 792.56B | 14.63B | 16.61B | Stockholders Equity |
| 51.54B | 47.30B | 54.72B | 57.17B | 51.55B |
| Cash Flow | Free Cash Flow | |||
| 26.49B | 20.42B | 35.94B | 47.41B | 20.05B | Operating Cash Flow |
| 26.49B | 20.42B | 17.73B | 23.16B | 20.05B | Investing Cash Flow |
| -18.46B | -13.72B | -18.61B | -24.44B | -14.15B | Financing Cash Flow |
| -4.17B | -5.04B | -3.00B | -2.05B | 663.00M |
Manulife Financial Technical Analysis
Neutral
42.06
Price Trends
42.92
Negative
43.10
Negative
39.54
Positive
Market Momentum
-0.28
Positive
46.70
Neutral
15.99
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:MFC, the sentiment is Neutral. The current price of 42.06 is below the 20-day moving average (MA) of 42.61, below the 50-day MA of 42.92, and above the 200-day MA of 39.54, indicating a neutral trend. The MACD of -0.28 indicates Positive momentum. The RSI at 46.70 is Neutral, neither overbought nor oversold. The STOCH value of 15.99 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:MFC.
Manulife Financial Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | C$71.15B | 14.45 | 11.03% | 4.09% | 7.64% | 9.22% | |
73 Outperform | C$43.79B | 8.25 | 16.48% | 1.14% | 13.82% | -6.68% | |
72 Outperform | $44.64B | 14.90 | 12.87% | 4.39% | -12.72% | -0.16% | |
71 Outperform | C$30.88B | 14.65 | 10.36% | 4.59% | 30.81% | -2.47% | |
69 Neutral | C$47.63B | 12.46 | 15.52% | 4.26% | -2.40% | 42.24% | |
66 Neutral | C$11.39B | 13.01 | 13.26% | 2.78% | -17.69% | 29.19% | |
64 Neutral | $13.79B | 10.52 | 9.20% | 4.24% | 17.25% | -7.60% |
* Financial Sector Average
Performance Comparison
TSE:MFC
Manulife Financial
42.06
10.69
34.06%
TSE:SLF
Sun Life Financial
78.78
7.63
10.72%
TSE:FFH
Fairfax Financial Holdings
1,945.23
468.11
31.69%
TSE:IAG
iA Financial Corporation Inc
126.36
42.26
50.25%
TSE:GWO
Great-West Lifeco
51.13
10.61
26.18%
TSE:POW
Power Corp of Canada
48.22
11.29
30.57%
Manulife Financial Earnings Call Summary
Earnings Call Date: Feb 19, 2025 | % Change Since: 0.43% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong performance for Manulife in 2024, with significant achievements in core earnings, digital transformation, and shareholder returns. Despite challenges from global minimum tax and lower returns in the US segment and real estate investments, the company demonstrated resilience and strategic growth.Highlights
Record Core Earnings
Manulife achieved record core earnings exceeding $7 billion for the first time, a 10% increase from 2023.
Successful Portfolio Restructuring
Executed milestone reinsurance transactions, including the largest-ever LTC reinsurance with Global Atlantic and Canadian universal life reinsurance with RGA, resulting in a $2.8 billion capital release.
Strong Digital Transformation
Generated over $600 million of benefits from digital initiatives, 3.5 times the level in 2023. Launched 27 GenAI use cases into production.
Robust APE Sales and New Business Growth
Record APE sales and new business value growth of over 30%, with the highest growth from Asia.
Increased Shareholder Returns
Returned over $6 billion to shareholders through dividends and buybacks, with a 10% increase in quarterly dividend.
Global WAM Growth
Global WAM achieved positive net inflows of $1.2 billion and a 34% increase in core earnings.
Lowlights
Impact of Global Minimum Tax
Global minimum tax reduced core earnings growth by approximately 3 percentage points.
Challenges in US Segment
US segment saw a 16% decrease in core earnings due to lower investment spreads and impacts from reinsurance transactions.
Public Equity and Real Estate Returns
Reported a $113 million charge due to lower than expected public equity returns and a $97 million charge from lower returns on commercial real estate investments.
Company Guidance
During the Manulife Financial Fourth Quarter 2024 Results Conference Call, the company announced several key metrics and strategic initiatives. Manulife achieved record core earnings surpassing $7 billion, a 10% increase from 2023, with Asia and Global Wealth and Asset Management (WAM) contributing to 70% of these earnings. The company reported $13.3 billion in net inflows from Global WAM and executed significant reinsurance transactions, releasing $2.8 billion in capital and contributing to a 0.4 percentage point accretion to core ROE. Manulife's digital transformation efforts led to a record-high relationship net promoter score (NPS) of 27 and an STP rate of 89%, generating over $600 million in benefits, 3.5 times the 2023 level. The company also demonstrated strong expense management, achieving an efficiency ratio of 44.8% and growing adjusted book value per share by 15%. Manulife announced a 10% increase in its common share dividend and a new buyback program to repurchase up to 3% of outstanding common shares. The company maintained a robust balance sheet with a LICAT ratio of 137% and a leverage ratio of 23.7%.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.