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Manulife Combines Reliable Yield, Modest Valuation And Momentum

Geoff Considine profile picture
Geoff Considine


  • Manulife has risen consistently and dramatically since its 2020 COVID lows.
  • MFC has a reliable dividend yield of 4.3% and a modest valuation.
  • The Wall Street analyst opinion is bullish.
  • The options market is sending a modestly bullish signal.

Manulife (NYSE:MFC) provides a diverse set of insurance and investment products and services to a global client base. The company has incurred substantial unanticipated costs over the past year, but has also seen increased demand for its wealth and asset management business lines. While Manulife stock swooned along with the rest of the equity market in early 2020, it has recovered strongly from its 2020 COVID-driven lows. After bottoming out at $8.90 on March 23, 2020, the stock has risen to its current price of $20.8. The price has gained 12.4% in the last month and 19.6% over the past three months.

Price chart and basic statistics for MFC (Source: Seeking Alpha)

The forward P/E for MFC is a bit lower than for peer firms like Aflac (AFL) and Prudential (PRU), and the yield is an attractive 4.3%. The three- and five-year compound dividend growth rates are 9.49% and 9.78%, respectively. Even with the 20% gain over the past ninety days, the valuation still looks very reasonable.

Trailing quarterly earnings and forward estimates (green values are earnings beat amounts and red values are earnings miss amounts) Source: eTrade

Looking at quarterly earnings, three features are evident. First, the company has delivered remarkably stable quarterly earnings year after year, with the obvious exception of Q1 2020. Second, the analyst outlook is for very modest earnings growth.

Third, although the stock has missed earnings expectations occasionally, the amounts of the misses are very small (again with Q1 2020 being the exception). MFC has a very stable and, therefore, predictable earnings stream. Fundamental valuations are likely to be far more meaningful for this kind of stock than for most others. This, in turn, suggests higher confidence in the analyst-generated outlooks.

Wall Street Analyst Outlook

The consensus opinion of Wall Street analysts is bullish, but

This article was written by

Geoff Considine profile picture
Geoff has worked in quantitative finance for more than twenty years. Before entering finance, Geoff was a research scientist for NASA. Geoff holds a PhD in Atmospheric Science from the University of Colorado - Boulder and a BS in Physics from Georgia Tech. Neither Geoff Considine nor Quantext (Geoff's company) are investment advisors. Nothing in any commentary here on Seeking Alpha or elsewhere shall be regarded as advice.

Analyst’s Disclosure: I am/we are long MFC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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