Manulife Earnings: Continued Growth Momentum in Asia and Strong Profitability Mark a Good Quarter

No-moat-rated Manulife Financial reported strong results in the third quarter as growth momentum continued in Asia and underwriting profitability remained solid. The company reported core earnings of CAD 1.74 billion or CAD 0.92 per share in the third quarter versus CAD 1.34 billion or CAD 0.68 per share in the third quarter of the previous year. The third-quarter results equated to an annualized core return on equity of 16.8%, which is higher than the company’s long-term target of 15%. Higher interest rates have been a tailwind for the company, resulting in higher expected investment earnings. The company paid a quarterly dividend of CAD 0.365 per share in the third quarter of 2023, which represents a 5.7% dividend yield as per the current stock price. The adjusted book value of the company stood at CAD 30.7 in the third quarter, up 4% compared with the third quarter of the previous year. We are maintaining our CAD 29 fair value estimate for Manulife after incorporating the third-quarter results.