Company Reports

Sun Life Financial provides a variety of financial-services products including life insurance, retirement solutions, and investment management, mainly in the U.S., Canada, and Asia. The investment management business of the company has achieved adequate scale and is a source of stable earnings and cash flows.

No-moat-rated Sun Life Financial reported a strong set of numbers with underlying net income of CAD 983 million or CAD 1.68 per share in the fourth quarter, up 10% versus CAD 892 million or CAD 1.52 per share in the fourth quarter of the previous year. The fourth-quarter results equated to an annualized underlying return on equity of 18.4%, which is largely in line with management’s medium-term guidance of 18%. The company paid a quarterly dividend of CAD 0.78 per share in the fourth quarter of 2023, which represents a 4.4% dividend yield as per the current stock price. We are maintaining our CAD 63 fair value estimate for Sun Life after incorporating the fourth-quarter results.

No-moat-rated Sun Life Financial reported a middling set of numbers as the company reported underlying net income of CAD 930 million or CAD 1.59 per share in the third quarter versus CAD 949 million or CAD 1.62 per share in the third quarter of the previous year. The third-quarter results equated to an annualized underlying return on equity of 17.7% that is largely in line with management’s medium-term guidance of 18%. The company paid a quarterly dividend of CAD 0.78 per share in the third quarter, which represents a 4.7% dividend yield as per the current stock price. We are maintaining our CAD 63 fair value estimate for Sun Life after incorporating the third-quarter results.

Sun Life provides a variety of financial-services products including life insurance, retirement solutions, and investment management, mainly in the U.S., Canada, and Asia. The investment management business of the company has achieved adequate scale and is a source of stable earnings and cash flows.

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.

No-moat-rated Sun Life Financial reported a decent set of numbers to start the year and transitioned to IFRS 17 financial reporting standard. The company reported underlying net income of CAD 895 million or CAD 1.52 per share in the first quarter versus CAD 720 million or CAD 1.23 per share in the first quarter of the previous year. The first-quarter results equated to an annualized underlying return on equity of 17.3%. The company paid a quarterly dividend of CAD 0.72 per share in the first quarter of 2023, which represents a 4.4% dividend yield as per the current stock price. We note that the dividend payout has been 45%-55% of underlying earnings over the past year, highlighting the safety of the dividend. We are maintaining our CAD 63 fair value estimate for Sun Life after incorporating the first-quarter results.

Sun Life provides a variety of financial services products, including life insurance, retirement solutions, and investment management products mainly in the U.S., Canada, and Asia. The investment management business of the company has achieved adequate scale and is a source of stable earnings and maintained cash flows.

No-moat-rated Sun Life Financial ended the year with a decent set of numbers as the company reported underlying net income of CAD 990 million or CAD 1.69 per share in the fourth quarter, up 10% compared with CAD 898 million or CAD 1.53 per share in the fourth quarter of the previous year. The fourth-quarter results equated to an underlying return on equity of 15.7%. We are maintaining our CAD 59 fair value estimate for Sun Life after incorporating the latest results.

We are relaunching Sun Life Financial with a fair value estimate of CAD 59 per share after taking a fresh look at it. Our fair value estimate implies that Sun Life is slightly overvalued at current prices. Sun Life provides life insurance, retirement, and asset management products and services to individuals and corporate customers in Canada, the United States, and Asia. Sun Life is one of Canada’s big three Life Insurance companies (the other two are Manulife and Great West Life). We assign a no-moat rating, a stable moat trend, and a standard capital allocation rating to the company.

Sun Life provides a variety of financial services products, including life insurance, retirement solutions, and investment management products mainly in the U.S., Canada, and Asia. The investment management business of the company has achieved adequate scale and is a source of stable earnings and maintained cash flows.

Sun Life reported a fairly healthy third quarter. Adjusted earnings of CAD 1.62 topped the FactSet consensus estimate of CAD 1.47 with underlying returns on equity of 15.5% virtually unchanged from the year-ago period. U.S. insurance earnings were strong while asset management profits declined amid falling market values. We will maintain our no-moat rating and fair value estimate of CAD 66 on Sun Life’s shares.

Following the 2008-09 financial crisis, Sun Life made several positive changes to its business operations, most notably selling its lagging U.S. life insurance and annuities business. Sun Life’s medium-term objectives include underlying EPS growth of 8%-10%, underlying returns on equity of 12%-14%, and a dividend payout rate of 40%-50%.

Following the 2008-09 financial crisis, Sun Life made several positive changes to its business operations, most notably selling its lagging U.S. life insurance and annuities business. Sun Life’s medium-term objectives include underlying EPS growth of 8%-10%, underlying returns on equity of 12%-14%, and a dividend payout rate of 40%-50%.

Sun Life had a mixed second quarter with just 1% underlying net income growth. Insurance results were generally decent while the asset management unit saw a 16% underlying constant currency profit decline amid equity market declines and lackluster flows. We will maintain our fair value estimate of $52 on the no-moat firm. We are adjusting our Morningstar Uncertainty Rating to Medium from High as we believe that more accurately reflects the risk in Sun Life’s shares.

Following the 2008-09 financial crisis, Sun Life made several positive changes to its business operations, most notably selling its lagging U.S. life insurance and annuities business. Sun Life’s medium-term objectives include underlying EPS growth of 8%-10%, underlying return on equity of 12%-14%, and a dividend payout rate of 40%-50%.

No-moat-rated Sun Life Financial reported a decent start to 2022. Underlying earnings per share in the first quarter of CAD 1.46 were a touch above the FactSet consensus of CAD 1.44. While rising interest rates are a tailwind for life insurers, lower market levels and the effects on inflation are headwinds for Sun Life. Overall, there was little in the earnings release that would alter our long-term view of the firm, and we will maintain our fair value estimate of CAD 66.

Following the 2008-09 financial crisis, Sun Life made several positive changes to its business operations, most notably selling its lagging U.S. life insurance and annuities business. Sun Life’s medium-term objectives include underlying EPS growth of 8%-10%, underlying return on equity of 12%-14%, and a dividend payout rate of 40%-50%.

Sun Life reported a decent quarter with underlying EPS of CAD 1.53 roughly consistent with the FactSet consensus expectation of CAD 1.52. Underlying income rose just 4% as strength in asset management was offset by weakness in the U.S. insurance. Overall there was little in the firm’s earnings release that would alter our long-term view of SunLife and we will maintain our no-moat rating and fair value estimate of CAD 70.

Following the 2008-09 financial crisis, Sun Life made several positive changes to its business operations, most notably selling its lagging U.S. life insurance and annuities business. Sun Life’s medium-term objectives include underlying EPS growth of 8%-10%, underlying return on equity of 12%-14%, and a dividend payout rate of 40%-50%.

Sun Life reported a decent third quarter with underlying EPS of CAD 1.54 roughly in line with the FactSet consensus estimate of CAD 1.53. Underlying net income was up 7%. Asset management was the star of the quarter with 23% underlying earnings growth, which is not surprising given equity market appreciation. Underwriting generally weighed on the firm’s insurance operations. Overall, there was little that would alter our long-term view of the firm, and we will maintain our fair value estimate of CAD 68.