Sun Life (SLF), IFC and GWO: 3 TSX insurance stocks for defensive play

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Sun Life (SLF), IFC and GWO: 3 TSX insurance stocks for defensive play

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Sun Life (SLF), IFC and GWO: 3 TSX insurance stocks for defensive play
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Highlights

  • Higher interest rate could contribute to a stimulated growth for the financial sector, with boosted earnings and profit margins.
  • Some insurance stocks like Sun Life (TSX: SLF), Great-West Lifeco Inc (TSX: GWO) and Intact Financial (TSX: IFC) are known to consistently dole out dividends and hike their payouts from time to time.
  • An insurance company listed here held a five-year dividend growth rate of nearly eight per cent.

The recent increase in interest rates that the Bank of Canada announced this month has left some investors down in the dumps. However, it is worth noting that a higher interest rate could contribute to a stimulated growth for the financial sector, with boosted earnings and profit margins.

Keeping this in mind, let us look at TSX insurance stocks Sun Life (TSX: SLF), Great-West Lifeco Inc (TSX: GWO) and Intact Financial (TSX: IFC), which are known to consistently dole out dividends and hike their payouts from time to time. 

Sun Life Financial Corp (TSX: SLF)

Last week, on March 9, Sun Life launched Prosper by Sun Life, a hybrid advice solution powered by the online platform to guide customers towards their goals. Its e-signature capabilities enable customers to store files online and complete important paperwork securely.

Sun Life reported a net profit of C$ 1.07 billion in Q4 FY2021, up 45 per cent year-over-year (YoY). Its underlying net income rose by four per cent YoY to C$ 898 million in the latest quarter.

Notably, its five-year dividend growth rate has been nearly eight per cent.

Also read: Why is Turquoise Hill (TSX: TRQ) stock surging? 

Intact Financial Corp (TSX: IFC)

Intact Financial’s net profit rose by 85 per cent YoY to C$ 701 million in the fourth quarter of fiscal 2021.

The Toronto-headquartered insurer also increased its quarterly dividend by 10 per cent to C$ 1 per share, scheduled for March 31.

Intact Financial Corp (TSX: IFC) Q4 FY2021 results

IFC stock has climbed by almost 20 per cent in the last one year.

Also read: Ag Growth (AFN) and Ceres (CRP): 2 TSX agricultural stocks to see 

Great-West Lifeco Inc (TSX: GWO)

Great-West Lifeco posted C$ 825 million in net income in Q4 FY2021 compared to C$ 741 million a year ago. Currently, the Winnipeg-based company pays a quarterly dividend of C$ 0.49 per share (payable for March 31).

Stocks of Great-West shot up by almost 11 per cent in the past 12 months.

Bottomline

Some market experts believe that the Bank of Canada is likely to further increase its interest rates amid the inflation surge. If this happens, it could cause wide fluctuations in the stock markets, especially affecting overvalued growth equities.

While robust insurance companies can be a defensives investment option during such uncertain times, investors should bear in mind that market fluctuations can impact even the giants in the game.

Also read: Loblaw (TSX: L) to buy Lifemark. Retail stock to buy?

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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