December 10, 2018

Manulife Financial (MFC)

 

 


 

Manulife Financial (MFC) is a multinational company that handles insurance and other financial products of all kinds.  They are Canadian-based and serve clients in 22 countries through about 45,000 employees.  The countries (other then their Canadian home base) that they have large-scale operations in include the USA (through a subsidiary named “John Hancock”), Japan, and China.  One piece of unique trivia about Manulife is the fact that the first Canadian Prime Minister (John. A. Macdonald) was one of the founders of the company.

 

Manulife Financial (MFC) has been amongst the leaders in Canadian financial services for over a hundred-and-twenty years now.  It offers a full-range of insurance products including individual life insurance, group life and health coverage, property insurance, and long-term care services.  As a Canadian-based insurance company they are also fully diversified into offering pension products, annuities, and other banking options.  Manulife is one of the most internationally exposed Canadian insurance firms, and they remain committed to that strategy despite recent global financial downturns.  They pride themselves on being on the innovative edge of technology and services that they are able to offer.

 Manulife-One

Recent financial news has not been kind to the Canadian insurance companies, and it has hit Manulife especially hard.  When the economic crisis hit in 2008 Manulife (MFC) was forced to make an extremely drastic cut to their dividend.  As most dividend investors know, a cut to a company’s dividend of any kind is a pretty sure sign of distress.  It is a kind of investing ‘sacred cow’ that a company never cuts its dividend unless it is in fairly serious trouble.  Manulife cut their dividend in half, from 26 cents to an astounding 13 cents.  While the company tried to put a positive spin on the move saying that they now had the, “Flexibility to respond to both risks and opportunities from a position of strength,” there is little doubt that the cut spooked investors.  Regardless of whether or not it was a smart move for the overall operation of the company (it very well might have saved Manulife from a worse financial position), it does make it difficult for dividend investors to trust Manulife Financial (MFC) in the future.  Their market capitalization has still not recovered from the hit.

 

Things don’t look to be picking up too much for Canadian insurers, but Manulife and the others may have staunched the bleeding for the time being.  Last year the company seen billions of dollars in losses, and 2011 doesn’t appear like it will generate many profits either.  Some investors believe that with the insurance industry hurting this bad, now is the perfect time to get a piece of a company whose underlying fundamentals are still strong.  The stock is selling right now for around $14.50, and that is substantially lower than its peak of around $40 pre-2008.  Even with its reduced dividend, the stock is yielding 3.4% and as a fairly mature company one would expect Manulife Financial (MFC) to try to raise its dividend quickly as the economic recovery continues.

 

 

Manulife Financial (MFC) Dividend Stock Graph:

TSE MFC

Manulife Financial (MFC) Dividend Metrics:

TickerNamePriceDividend YieldPayout RatioDEBT_TO_MKT_CAPDividend Growth 5 yearsDividend Growth 1 years
MFCManulife Financial Corp17.253.01#VALUE!0.355265300

 

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