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Manulife Financial Corp (TSE:MFC)
TSX:MFC
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Manulife Financial
(TSX:MFC)
Rating:75Outperform
Price Target:
C$48.00
â–²(12.99%Upside)
Positive Factors
Earnings Growth
4Q24 value of new business (VNB) rose 31% year-over-year, surpassing expected growth, with strong performance across Asia.
Financial Performance
Revised earnings and VNB growth forecasts result in a raised target price for Manulife, reflecting better-than-expected business momentum.
Shareholder Returns
A 10% increase in quarterly dividend and a refreshed share buyback program aim to reward shareholders.
Negative Factors
Macroeconomic Challenges
Manulife's diversified portfolio is well positioned to navigate macroeconomic challenges, including heightened US-China tensions.
Manulife Financial (MFC) vs. iShares MSCI Canada ETF (EWC)
Market Cap
$71.40B
Dividend Yield4.22%
Average Volume (3M)6.95M
Price to Earnings (P/E)16.0
Beta (1Y)1.28
Revenue Growth5.24%
EPS Growth13.68%
CountryCA
Employees37,000
SectorFinancial
Sector Strength75
IndustryInsurance - Life
Share Statistics
EPS (TTM)0.99
Shares Outstanding1,712,710,800
10 Day Avg. Volume4,478,787
30 Day Avg. Volume6,954,883
Financial Highlights & Ratios
PEG Ratio-1.98
Price to Book (P/B)1.41
Price to Sales (P/S)0.00
P/FCF Ratio2.54
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$53.01Price Target Upside24.79% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
Manulife Financial Business Overview & Revenue Model
Company DescriptionManulife Financial Corporation (MFC) is a leading international financial services group providing financial advice, insurance, and wealth and asset management solutions for individuals, groups, and institutions. Headquartered in Toronto, Canada, Manulife operates primarily in Asia, Canada, and the United States through its John Hancock brand. The company offers a diverse range of products and services, including life insurance, retirement solutions, mutual funds, and investment management services.
How the Company Makes MoneyManulife Financial makes money through a combination of insurance premiums, investment income, and fees from its wealth and asset management services. The company generates revenue from the sale of life and health insurance products, which provide policyholders with financial protection in exchange for regular premium payments. Additionally, Manulife earns investment income by managing a substantial portfolio of assets, including equities, bonds, and real estate, and leveraging its expertise in asset management to generate returns. The company also collects fees from managing mutual funds, pension plans, and other investment products through its wealth and asset management division. Key partnerships with financial institutions and distribution networks further enhance its ability to reach a broad customer base, contributing to its revenue streams.
Manulife Financial Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: -1.20%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong performance in Asia and Global WAM, with robust capital returns to shareholders. However, challenges such as the P&C reinsurance charge, higher ECL provisions, and negative ALDA experience indicate some headwinds. Despite these challenges, the overall performance and strategic positioning of Manulife were portrayed positively.Q1-2025 Updates
Positive Updates
Strong Growth in Asia AP Sales
Asia AP sales increased 50%, reflecting strong customer demand and continued execution in the region.
Positive Net Flows in Global WAM
Global WAM generated positive net flows of $500 million despite market volatility, demonstrating resilience.
Core EPS Increase
Core EPS increased 3%, driven by momentum in Asia and Global WAM businesses and share buybacks.
Improved Balance Sheet and Capital Metrics
A strong LICAT ratio of 137% and leverage ratio of 23.9% indicate robust balance sheet management.
Record Growth in New Business Metrics
New business CSM and new business value grew by 31% and 36% respectively, driven by 37% growth in AP sales.
Core Earnings Growth in Global WAM
Global WAM achieved over 20% growth in pre-tax core earnings for the sixth consecutive quarter.
Strong Performance in Asia Segment
Asia segment recorded a 50% increase in AP sales and 7% growth in core earnings year-on-year.
Shareholder Returns
Returned over $1.2 billion of capital to shareholders through dividends and share buybacks during the quarter.
Negative Updates
P&C Reinsurance Charge
A $35 million pre-tax charge related to California wildfires affected P&C reinsurance results.
Higher Expected Credit Loss (ECL) Provision
A $46 million pre-tax ECL charge was driven by updates to reflect the deteriorating economic environment.
Non-core Charge from Realized Losses
A non-core charge of $781 million from realized losses, mostly from fixed income asset disposals.
Negative ALDA Experience
A $275 million charge in the ALDA portfolio due to lower than expected returns on commercial real estate and private equity.
Declining U.S. Segment Earnings
Core earnings in the U.S. decreased 25% from a year earlier due to unfavorable net claims experience and lower investment spreads.
Company Guidance
During the Manulife Financial first quarter 2025 earnings call, significant metrics were highlighted by CEO Roy Gori and CFO Colin Simpson. Asia Annual Premium (AP) sales soared by 50%, showcasing robust customer demand and strategic execution in the region. Core Earnings Per Share (EPS) rose by 3%, attributed to strong performance in Asia and Global Wealth and Asset Management (WAM) sectors, alongside share buybacks. Noteworthy was the charge in the Property and Casualty (P&C) reinsurance segment due to California wildfires, and an increased Expected Credit Loss (ECL) provision reflecting market conditions. After adjusting for these items, core EPS would have risen by 9%. The company's LICAT ratio stood at a strong 137%, and the leverage ratio was at 23.9%, underscoring a robust balance sheet. Global WAM achieved positive net flows of $500 million despite market volatility. New business metrics were impressive, with AP sales up 37% year-on-year, driven by 50% growth in Asia, contributing to a 36% increase in new business value and a 31% rise in new business Contractual Service Margin (CSM). The company returned over $1.2 billion to shareholders through dividends and share buybacks during the quarter, maintaining a strong capital position to weather macroeconomic uncertainties.Manulife Financial Financial Statement Overview
Summary
Manulife Financial demonstrates robust financial health across income, balance sheet, and cash flow metrics. Strong profitability and cash generation are supported by a solid balance sheet structure, positioning the company well within the life insurance industry. However, revenue growth is moderate.Income Statement
Manulife Financial shows strong profitability with a gross profit margin of 52.53% and a net profit margin of 10.04% in TTM (Trailing-Twelve-Months), indicating efficient cost management. However, revenue growth has been relatively stagnant with a slight decline from the previous year. The EBIT margin remains robust at 37.08%, reflecting operational efficiency.77
Positive
Balance Sheet
The balance sheet is stable with a debt-to-equity ratio of 0.27, suggesting prudent leverage management. The equity ratio of 5.28% indicates a conservative structure suitable for the insurance industry. Return on equity stands at 10.18%, showcasing effective shareholder value creation.82
Very Positive
Cash Flow
The cash flow statement highlights strong cash generation with a positive operating cash flow to net income ratio of 5.43 in TTM, signifying efficient cash operations. Free cash flow has grown significantly by 7.99% from the previous year, indicating robust financial health.85
Very Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 45.58B | 42.31B | 23.62B | 59.84B | 77.12B |
| Gross Profit | 15.11B | 13.68B | 1.00B | 25.27B | 23.30B |
| EBITDA | 7.26B | 6.59B | -3.56B | 9.66B | 8.61B |
| Net Income | 5.63B | 5.46B | -2.10B | 6.66B | 5.33B |
Balance Sheet | |||||
| Total Assets | 978.82B | 875.57B | 848.94B | 917.64B | 880.35B |
| Cash, Cash Equivalents and Short-Term Investments | 25.79B | 20.34B | 19.15B | 22.59B | 26.17B |
| Total Debt | 14.16B | 12.74B | 12.36B | 11.86B | 13.99B |
| Total Liabilities | 925.86B | 826.85B | 792.56B | 858.77B | 827.34B |
| Stockholders Equity | 51.54B | 47.30B | 46.80B | 58.41B | 51.55B |
Cash Flow | |||||
| Free Cash Flow | 26.49B | 20.42B | 16.63B | 23.16B | 20.05B |
| Operating Cash Flow | 26.49B | 20.42B | 16.63B | 23.16B | 20.05B |
| Investing Cash Flow | -18.46B | -13.72B | -18.40B | -24.44B | -14.15B |
| Financing Cash Flow | -4.17B | -5.04B | -2.11B | -2.05B | 663.00M |
Manulife Financial Technical Analysis
Positive
42.48
Price Trends
43.05
Negative
42.47
Positive
42.42
Positive
Market Momentum
-0.33
Positive
50.14
Neutral
37.76
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:MFC, the sentiment is Positive. The current price of 42.48 is above the 20-day moving average (MA) of 42.47, below the 50-day MA of 43.05, and above the 200-day MA of 42.42, indicating a neutral trend. The MACD of -0.33 indicates Positive momentum. The RSI at 50.14 is Neutral, neither overbought nor oversold. The STOCH value of 37.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:MFC.
Manulife Financial Peers Comparison
Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | C$13.40B | 15.31 | 12.54% | 2.49% | -7.31% | 28.65% | |
80 Outperform | $59.20B | 9.45 | 17.21% | 0.88% | 17.40% | 11.85% | |
76 Outperform | C$54.09B | 24.16 | 12.95% | 1.75% | 4.73% | 44.14% | |
76 Outperform | C$47.97B | 12.58 | 14.65% | 4.72% | 17.48% | 25.54% | |
75 Outperform | $71.40B | 15.97 | 10.17% | 4.22% | 5.24% | 13.68% | |
75 Outperform | C$48.31B | 15.61 | 13.18% | 4.12% | 0.94% | 3.50% | |
68 Neutral | $16.73B | 11.75 | 9.79% | 3.76% | 11.87% | -7.97% |
* Financial Sector Average
Performance Comparison
TSE:MFC
Manulife Financial
42.48
8.28
24.20%
TSE:SLF
Sun Life Financial
85.35
20.11
30.83%
TSE:FFH
Fairfax Financial Holdings
2,448.49
872.65
55.38%
TSE:IAG
iA Financial Corporation Inc
144.90
58.25
67.22%
TSE:GWO
Great-West Lifeco
52.01
13.08
33.60%
TSE:IFC
Intact Financial Corporation
304.04
70.55
30.22%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.