Manulife Financial Corporation MFC has been in investors’ good books on the back of new business gains, higher investment income, strategic acquisitions and international business.
The Zacks Consensus Estimate for Manulife Financial’s 2022 and 2023 earnings per share is pegged at $2.78 and $2.90, respectively, indicating a year-over-year increase of 7.3% and 4.1%. The expected long-term earnings growth rate is pegged at 10%.
Earnings Surprise History
Manulife Financial has a decent earnings surprise history. Its earnings beat estimates in three of the last four quarters and missed the same once, the average being 3.9%.
Zacks Rank & Price Performance
Manulife Financial currently carries a Zacks Rank #3 (Hold). Year to date, the stock has rallied 3.9% against the industry’s decline of 6.6%.
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Manulife Financial has a favorable VGM Score of B. VGM Score helps identify stocks with the most attractive value, the best growth and the most promising momentum.
Return on Equity (ROE)
Manulife Financial’s trailing 12-month return on equity (ROE) was 13.3%, which expanded 230 basis points year over year. ROE reflects its efficiency in using shareholders’ funds.
Solid net fee income from higher average assets under management and administration in Global Wealth and Asset Management business, higher new business gains, lower corporate loss, higher investment income and double-digit in-force business growth in Canada and Asia are likely to benefit the core earnings of Manulife Financial.
MFC witnessed double-digit growth in new business value (NBV) in 2021 across Asia, Canada and the U.S. segment. Higher sales volumes, favorable interest rates, disciplined expense management as well as a favorable product mix, higher margins in annuities and international business are expected to drive NBV.
Manulife boasts an impressive inorganic growth story with acquisitions, which have added scale to its core business lines, including insurance, group benefits and group retirement.
In the fourth quarter of 2021, MFC inked a 16-year exclusive bancassurance partnership with VietinBank that is likely to enhance the insurer’s distribution capability in Vietnam with its wide range of insurance, wealth, and retirement solutions offerings. MFC also acquired Aviva Vietnam to further enhance its scale in Vietnam’s fast-growing market.
In 2021, expense efficiency ratio improved, and MFC has achieved the target of less than 50%. The insurer remains focused on driving efficient growth, ensuring scalable growth, outstanding customer experience as well as digital ways of working.
The life insurer boasts financial flexibility by virtue of solid growth in new business value, robust annualized premium equivalent sales growth and a strong balance sheet.
MFC continued to deploy capital by increasing the quarterly dividend by 18% in the fourth quarter of 2021 and resumed share repurchases under the recently launched Normal Course Issuer Bid (NCIB) program in the first quarter of 2022.
Estimates for 2023 have moved up nearly 1.4% in the past 30 days, reflecting investors’ optimism.
Stocks to Consider
Some better-ranked insurers include United Fire Group UFCS, Cincinnati Financial CINF and Kinsale Capital Group KNSL. While United Fire and Cincinnati Financial sport a Zacks Rank #1 (Strong Buy), Kinsale Capital carries Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
United Fire’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 275.45%. Year to date, United Fire has gained 21.3%.
The Zacks Consensus Estimate for UFCS’ 2022 and 2023 earnings has moved 122.2% and 76.9% north, respectively, in the past 30 days.
The bottom line of Cincinnati Financial surpassed earnings estimates in each of the last four quarters, the average being 38.48%. Year to date, the insurer has rallied 12.4%.
The Zacks Consensus Estimate for Cincinnati Financial’s 2022 and 2023 earnings has moved 5.7% and 5.5% north, respectively, in the past 30 days.
Kinsale Capital’s earnings surpassed estimates in each of the last four quarters, the average beat being 32.04%. Year to date, Kinsale Capital has lost 11.2%.
The Zacks Consensus Estimate for KNSL’s 2022 and 2023 earnings has moved 3.8% and 3.5% north, respectively, in the past seven days.
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