MFC, SLF, IFC, GWO & FFH: TSX financial stocks to buy if BoC ups rates

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MFC, SLF, IFC, GWO & FFH: TSX financial stocks to buy if BoC ups rates

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TSX financial stocks
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Highlights

  • The US central bank said it hiked the benchmark rate by 0.5 per cent, the most significant hike in more than two decades.
  • The stock of Manulife Financial Corporation is volume active, and 11.2 million MFC shares were traded during the trading session on Wednesday.
  • Great-West Lifeco's debt-to-equity (D/E) ratio is 0.40, which means that it has 40 cents of debt on every dollar of equity.

The Federal Reserve announced that it had hiked the interest rates to tackle the issue of rising inflation. The US central bank said it hiked the benchmark rate by 0.5 per cent, the most significant hike in more than two decades.

Recently, the central bank in Canada had also increased the interest rates. It indicated that the rates could rise further to fight the rapidly rising prices of products and services.

Some analysts believe that financial stocks could be an option worth exploring when interest rates are hiked. On that note, we have selected five financial stocks that could be considered while reshuffling an investment portfolio:

Manulife Financial Corporation (TSX:MFC)

Manulife has business operations in Asia, Canada, and the United States. It offers wealth management and insurance services. The MFC stock closed 1.2 per cent higher at C$ 25.43 per share on May 4.

The stock of Manulife Financial Corporation is volume active, and 11.2 million MFC shares were traded during the trading session on Wednesday.

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The MFC stock has a price-to-book (P/B) ratio of 0.966, and some analysts believe any value under one is considered a good value. Hence, it could be assumed that it is a growth stock. 

Sun Life Financial Inc. (SLF)

Sun Life Financial became the Toronto Raptors' official health and wellness partner, a basketball team. The insurance company is expanding its business operations, and its stock recorded a surge of 1.1 per cent on May 4.

The SLF stock has a history of significant volume, and it is one of the most active stocks listed on the Toronto Stock Exchange. The 10-day average volume of SLF shares was approximately 1.8 million.

Sun Life has a history of paying regular dividends, and its dividend yield is about 4.1 per cent.

Intact Financial Corporation (TSX:IFC)

The property and casualty insurance company had a stock price of C$ 177.3 per share at market close on May 4. Intact Financial completed a C$ 150 million preferred shares offering in March this year.

In Q4 2021, the net income of Intact Financial jumped 85 per cent year-over-year to C$ 701 million. Meanwhile, the earnings per share increased to C$ 3.85 from C$ 2.55 in Q4 2020.

Due to the growth in financial results, the insurance company had increased the dividend by C$ 0.09 per share, representing an increase of 10 per cent.

Great-West Lifeco Inc. (GWO)

It is one of the largest life insurance companies in Canada and has a presence worldwide and is not only limited to the North American markets.

Great-West Lifeco's debt-to-equity (D/E) ratio is 0.40, which means that it has 40 cents of debt on every dollar of equity, indicating that the company is not debt-ridden.

On May 4, the insurance company announced the results for the first quarter and said its net earnings payable to common shareholders jumped to C$ 770 million from C$ 707 million in Q1 2021.

Fairfax Financial Holdings Limited (TSX:FFH)

It is a holding company and provides property and casualty insurance services through its subsidiaries. On May 4, the FFH stock price was C$ 698.53 apiece after it jumped 2.2 per cent during market trading hours.

In Q1 2022, the net premiums written were US$ 5,342.7 million compared to US$ 4,145.9 million in Q1 2021. Meanwhile, the operating income from property and casualty insurance and reinsurance was US$ 562.4 million, up from US$ 298.2 million in the same comparable period.

Fairfax distributed an annual dividend of US$ 10 per unit, and its dividend yield is 1.8 per cent.

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Please note, the above content constitutes a very preliminary observation or view based on digital trends 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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