Sun Life Earnings: Group Health and Protection Segment Delivers Solid Results

No-moat-rated Sun Life Financial reported a decent set of numbers as the company reported an underlying net income of CAD 920 million or CAD 1.57 per share in the second quarter versus CAD 808 million or CAD 1.38 per share in the second quarter of the previous year. The results equated to an annualized underlying return on equity of 17.7% that is in line with the medium-term guidance of more than 18%. The company paid a quarterly dividend of CAD 0.75 per share in second-quarter 2023, which represents a 4.4% dividend yield per the current stock price. We note that the dividend payout has been in 40%-50% of the underlying earnings range over the past year, highlighting the safety of the dividend. We are maintaining our CAD 63 fair value estimate after incorporating these results.