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Shares of Manulife Financial Corporation MFC closed at $30.48 on Wednesday, near its 52-week high of $33.07. This proximity underscores investor confidence. It has the ingredients for further price appreciation. The stock is trading above the 50-day and 200-day simple moving averages (SMA) of $30.07 and $28.92, respectively, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.
The life insurer has a solid track record of beating earnings estimates in each of the last four quarters, the average being 5.98%.
MFC is an Outperformer
Shares of Manulife Financial have gained 25.4% in the past year, outperforming its industry, the Finance sector and the Zacks S&P 500 composite’s growth of 13%, 14.5% and 7.6%, respectively.
MFC One Year Price Performance
Image Source: Zacks Investment Research
MFC’s Growth Projection Encourages
The Zacks Consensus Estimate for Manulife Financial’s 2025 earnings per share indicates a year-over-year increase of 3.5%. The consensus estimate for 2026 earnings per share and revenues indicates an increase of 9.5% and 4.2%, respectively, from the corresponding 2025 estimates.
MFC beat earnings estimates in each of the past four quarters, with an average surprise of 5.98%.
Manulife Financial’s Favorable Return on Capital
Return on equity in the trailing 12 months was 15.9%, better than the industry average of 15.5%. This highlights the company’s efficiency in utilizing shareholders’ funds.
Key Points to Note for MFC
As its Asia business is reaping solid operational results, Manulife Financial targets to account for half of its core earnings by 2025 and play a crucial role in its long-term growth. Thus, the insurer is continually scaling up its business across Asia. We believe MFC is well-poised to benefit from continued business growth momentum, higher expected earnings on insurance contracts and higher expected investment earnings, with notable growth from the largest in-force business, Hong Kong and expanding distribution network.
Manulife Financial is expanding its Wealth and Asset Management business and has identified Europe (and the wider EMEA market) as a significant growth area. It is making long-term investments in this region.
MFC has been accelerating growth in the highest-potential businesses. Its inorganic growth is impressive, as this life insurer prudently deploys capital in high-growth, less capital-intensive and higher-return businesses.
Banking on its sturdy capital position, MFC distributes wealth to shareholders through higher dividends and share buybacks. The company has increased its dividend at a seven-year CAGR of 10% and targets a 35-45% dividend payout over the medium term.
MFC is strengthening its balance sheet and thus targets a leverage ratio of 25%. Notably, its free cash flow conversion has remained more than 100% over the last few quarters, reflecting its solid earnings.