Financial stocks have been trending on the Toronto Stock Exchange for the last three weeks. The S&P/TSX Financial index has soared by nearly 16 per cent in November while stocks such as Sun Life Financial Inc (TSX: SLF) and Manulife Financial Corp (TSX: MFC) have increased over 12 per cent and 19 per cent in the same period, respectively. The financial sector’s performance now seems to be rebounding in the wake of positive COVID-19 vaccine trial results.
Let us look at the market fundamentals and financial health of both financial service providers.
Current Stock Price: C$ 59.50
Sun Life Financial is one of Canada's leading life insurers along with Manulife and Great-West Lifeco. Sun Life offers insurance, retirement, and wealth management services to corporate and individual clients in Canada, the US, and Asia. It also holds a Boston-based asset-management firm, MFS Investment Management. The company earns about a third of its revenue from asset-management operations.
Sun Life Stock Performance
The stock has regained by over 67 per cent in value since the coronavirus pandemic caused market crash on March 24. The stock is trading 27.68 per cent up in the last six months. Its current market cap of the company stands at C$ 34.79 billion.
The stock has an earnings per share (EPS) of C$ 4.06 and a price-to-earnings (P/E) ratio of 14.70. Its current price-to-cash flow (P/CF) ratio is 4.50, and the price-to-book ratio is 1.559. The stock offers a positive return on equity (ROE) and return on assets (ROA) of 10.59 per cent and 0.76 per cent, respectively.
The company holds a current dividend yield of 3.697 per cent. It pays a quarterly cash dividend of C$ 0.55 per share. Its five-year dividend growth is 7.92 per cent, as per data on the TMX portal.
The insurance company is among the most actively traded stocks across the TSX and the TSXV with a 10-day average trading volume is 2.9 million units. Sun Life also made it to TMX’s top financial services stocklist that has stocks with the highest gains on the TSX and TSXV in the last 30 days, as per the TMX Money data.
Sun Life Financial Highlights
The company posted a net income with a C$69 million surge in the third quarter of 2020, a 10 per cent increase as compared to Q3 2019.
The life insurer registered wealth sales with a 65 per cent growth YoY to reach C$6.8 billion in Q3 2020, which was led by higher sales in Group Retirement Services (GRS) and higher product sales in personal wealth.
The company’s underlying net income improved by C$33 million, a 4 per cent surge from Q3 2019, to C$842 million in Q3 2020.
Its asset management business recorded a 25 per cent rise in YoY sales to reach nearly C$1.2 trillion AUM in the third quarter of 2020.
Current Stock Price: C$ 21.50
The Toronto-based company offers life insurance and wealth management services to clients in the United States, Canada, and Asia. The company is one of the three leading life insurance service providers in Canada.
Massachusetts-based Sun Life has been ranked among the top 10 employers by the Boston Globe's 2020 Top Places to Work for its innovative initiatives to employee assistance and safety during the COVID-19 pandemic.
Manulife has acquired 10 acres of heavy industrial zoned land in Ottawa’s dominant market that comprises an existing 108,500 square foot building for upcoming initiatives and redevelopment.
Manulife Stock Performance
Stocks of life insurer have rebounded by almost 66 per cent since the coronavirus pandemic led market crash on March 24. The insurance stock is trading with over 35 per cent growth in the last six months. The current market cap of the company stands at C$ 41.7 billion.
The company offers earnings per share (EPS) of C$ 2.64 and a price-to-earnings (P/E) ratio of 8.10. Its current price-to-cash flow (P/CF) ratio is 2.10, and the price-to-book ratio is 0.857. The stock delivers a positive return on equity (ROE) and return on assets (ROA) of 10.49 per cent and 0.59 per cent, respectively.
The stock holds a current dividend yield of 5.29 per cent. It pays a quarterly cash dividend of C$ 0.28 per share. Its five-year dividend growth is 10.15 per cent, as per data on the TMX portal.
The financial company’s 10-day average trading volume is 13.09 million units. The stock is placed among the most actively traded stocks across the TSX and TSXV in the last 10 days, as per the TMX Money data. Manulife also made it to TMX’s top financial services stocklist that has stocks with the highest gains on the TSX and TSXV in the last 30 days.
Manulife Financial Highlights
Manulife reported a net income of C$ 2.1 billion in the third quarter of 2020, which increased by C$ 1.3 billion from the same period in 2019. Its core earnings dropped six per cent YoY in Q3 2020 to C$1.5 billion.
The company’s core return on equity was at 11.4 per cent, and its return on equity (ROE) stood at 16.4 per cent in Q3 2020. The company posted a new business value (NBV) of C$ 460 million in Q3 2020, declined by 14 per cent compared to Q3 2019. The life insurer registered annualized premium equivalent (APE) sales of C$ 1.4 billion in the third quarter of 2020, a two per cent decrease year over year.