MFC, CIX, SLF: TSX non-bank financial stocks to beat rising inflation

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MFC, CIX, SLF: TSX non-bank financial stocks to beat rising inflation

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MFC, CIX, SLF: TSX non-bank financial stocks to beat market volatility
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Highlights

  • Some TSX financial stocks can help investors have an edge in an environment of high inflation and rate surge.
  • Manulife Financial recorded a net profit of C$ 2.97 billion in Q1 FY2022.
  • CI Financial reported an increased net profit of C$ 137.5 million in Q1 FY2022.

Canada saw inflation rise higher in April, with consumer prices surging by 6.8 per cent year-over-year, Statistics Canada reported on Wednesday, May 18. Some TSX financial stocks like Manulife Financial (TSX: MFC), CI Financial (TSX: CIX) and Sun Life Financial (TSX: SLF) can help investors have an edge in an environment of high inflation and interest rate surge.

Though not bank stocks, they too can charge a higher rate on loans, thereby increasing their profitability, and are known to distribute dividends.

Also, these three Canadian financial service companies recently released their Q1 FY2021 results. Let us thoroughly analyze their latest quarter results.

1.     Manulife Financial Corporation (TSX: MFC)

Manulife Financial recorded a net profit of C$ 2.97 billion in Q1 FY2022, considerably up from C$ 783 million earned in Q1 2021. However, the insurance company reported a decline in its core earnings to C$ 1.55 billion in the latest quarter from C$ 1.62 billion in Q1 2021.

The large-cap financial company posted diluted earnings per share (EPS) of 1.50 in the first three months of 2022 compared to C$ 0.38 a year earlier. Manulife Financial also declared a quarterly dividend of C$ 0.33 per share, payable on June 20.

MFC stock plummeted by nearly five per cent year-over-year (YoY), making it comparatively discounted. Manulife Financial’s Relative Index (RSI) value was 38.95 on Wednesday, May 17.

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2.     CI Financial Corp (TSX: CIX)

CI Financial reported an increased net profit of C$ 137.5 million in the first quarter of FY2022 compared to C$ 124.8 million in the prior-year quarter. The mid-cap financial service company also saw a positive change in its diluted EPS from 0.60 in Q1 2021 to C$ 0.70 in the latest quarter.

CI Financial is scheduled for a quarterly dividend payment of C$ 0.18 per share on July 15.

CIX stock slipped by over 31 per cent in one year and had RSI value below 33.63 on May 17, as per Refinitiv data.

3.     Sun Life Financial Inc (TSX: SLF)

Sun Life Financial’s insurance sales zoomed to C$ 799 million in the first three months of 2022 from C$ 730 million a year ago. On the contrary, its net income plunged to C$ 858 million in Q1 2022 from C$ 937 million in the same quarter of 2021. Its underlying net income also slipped to C$ 843 million in the latest quarter from C$ 850 million in Q1 2021.

Sun Life also raised its quarterly dividend to C$ 0.69 apiece, payable on June 30, from C$ 0.66 paid earlier.

SLF stock sank by nearly five per cent YoY, and its RSI value was 35.81 on May 17, according to Refinitiv.

 MFC, CIX and SLF: Are these 3 TSX financial stocks a buy?

Bottomline

The S&P/ TSX Capped Financial Index has gained by over three per cent in the past one year, while the TSX benchmark spiked by over five per cent. Also, looking at their RSI value chart from Refinitiv, these three stocks have grown above the 30-mark (RSI below 30 indicates that the stock is oversold in the market. These Canadian financial stocks can still be a safer choice for the near-term and long term.

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Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks. 

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