Get 3.6% and 4.7% yields from Sun Life Financial and Manulife Financial Corp.
Although COVID-19 has slowed share-price growth, both firms should rebound quickly once the coronavirus outbreak ease. Meanwhile, investors tap their high, sustainable dividends.
Canadian finance regulators have instructed banks and other big financial institutions to freeze their dividends during the COVID-19 pandemic. However, both companies are in a strong position to resume regular increases when the crisis passes.
MANULIFE FINANCIAL CORP. (Toronto symbol MFC; www.manulife.ca) is Canada’s largest life insurer.
Manulife sells other forms of insurance, including health, dental and travel plans; its mutual funds and investment management services further diversify its revenue stream.
As of September 30, 2020, the company had $1.3 trillion in assets under administration. Increasingly, markets outside of Canada—especially Asia—contribute to its growth.
In the quarter ended September 30, 2020, overall earnings before unusual items fell 4.8%, to $1.45 billion from $1.53 billion a year earlier. With fewer shares outstanding, earnings per share dropped 3.9%, to $0.73 from $0.76.
The resurgence of COVID-19 hurt insurance sales in Hong Kong, but that was mostly offset by higher sales in Japan and in Canada.
As well, despite the pandemic, Manulife’s asset management businesses reported a net outflow of $2.2 billion compared to a higher net outflow of $4.4 billion a year earlier.
With the March 2020 payment, the company handed its investors a 12.0% dividend hike. The new annual rate of $1.12 a share gives you a high 4.7% yield.
Blue Chip Stocks: Earnings Are Up 4.2% At This Provider
SUN LIFE FINANCIAL (Toronto symbol SLF; www.sunlife.ca) sells life coverage, savings, retirement and pension products. The company operates in Canada, the U.S., Asia and the U.K. It has $1.2 trillion in assets under management.
In the quarter ended September 30, 2020, Sun Life’s earnings rose 4.1%, to $842 million from $809 million a year earlier; earnings per share increased 5.1%, to $1.44 from $1.37.
Insurance sales were flat in the latest quarter, compared to a year earlier. That reflects a drop in group benefit sales in Canada, offset by strong sales in the U.S. Asia sales were unchanged. Meanwhile, sales from wealth management were up 28% on strong group retirement results in Canada and strong sales growth in mutual and managed fund in the U.S.
In December 2019, the company raised your quarterly dividend by 3.6%. The annual rate of $2.20 offers 3.6% yield.
Recommendation in Dividend Advisor: Sun Life Financial and Manulife Financial Corp. are buys.