Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Canadian insurance giant Manulife Financial (NYSE: MFC ) has earned a respected four-star ranking.
With that in mind, let's take a closer look at Manulife's business and see what CAPS investors are saying about the stock right now.
Manulife facts
| Headquarters (Founded) |
Toronto, Canada (1887) |
| Market Cap |
$26.88 billion |
| Industry |
Life and health insurance |
| Trailing-12-Month Revenue |
$39.51 billion |
| Management |
CEO Donald Guloien
CFO Michael Bell
|
| Return on Equity (Average, Past 3 Years) |
1.3% |
| Cash/Debt |
$20.77 billion / $14.07 billion |
| Dividend Yield |
3.4% |
| Competitors |
MetLife (NYSE: MET )
Prudential (NYSE: PRU )
Hartford Financial (NYSE: HIG )
|
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 96% of the 498 members who have rated Manulife believe the stock will outperform the S&P 500 going forward. These bulls include stshafer and All-Star awein001, who is ranked in the top 20% of our community.
Late last month, stshafer highlighted several of Manulife's positives: "Solid balance sheet, consistent dividend, great cash flows from operations, and smart management. I estimate that this company is underpriced by about 25-30% and has plenty of room to grow."
Manulife continues to make decent headway in repositioning its business for more stable long-term returns. Of course, with a juicy dividend yield of 3.4% -- much higher than that of rivals like MetLife (1.8%), Prudential (2.1%), and Hartford (0.8%), as well as dividend-less insurance plays like AIG (NYSE: AIG ) and ING (NYSE: ING ) -- Mr. Market doesn't seem to be giving Manulife enough credit.
CAPS awein2001 elaborates on the turnaround opportunity:
Through the boom times, Manulife sold a lot of unhedged future commitments with income guarantees, backed by their large investment portfolio, which was then decimated in the financial crisis. [T]o build up capital levels, they cut their dividend, issued a lot of shares (diluting existing shareholders) and have started an expensive hedging program.
They have traditionally traded at 2x book. ...
1) some of their investment losses should not be expected to be realized, especially if we ever see the economy recover
2) when they stop being an unloved pariah, their premium to book value should rise, even if it never regains the 2x premium they used to have
3) they have large healthy insurance franchises in Canada, the US and internationally, which should continue chugging on as the markets go up and down
What do you think about Manulife, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!
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