Sun Life Financial Inc. SLF is poised for long-term growth on the back of solid Asian presence, expanding global asset management business, and sturdy capital position. The company has an impressive VGM Score of B. This style score analyzes the growth prospect of a company.
Shares of Sun Life Financial have gained 19.8% year to date compared with the industry’s growth of 9.2% and the Zacks S&P 500 composite’s rise of 12.2%.
Sun Life Financial’s return on equity was 13.4% in the second quarter of 2019, higher than the industry average of 8.4%. Return on equity is a profitability measure that identifies the company’s efficiency in utilizing its shareholders’ funds.
The third largest insurer in Canada provides protection and wealth management products and services to individual and group customers worldwide. This Zacks Rank #2 (Buy) insurer is focusing on economies that are expected to provide higher return and growth than the North American markets. Notably, the company has intensified its focus on Asia.
Contribution from Sun Life’s Asian operations to its earnings has risen to 14% from 8% over the last few years. The company has strong presence in China, Philippines, India, Hong Kong and Indonesia, and has also forayed into Malaysia and Vietnam.
Sun Life is aggressively trying to grow its Global Asset Management Business, which has been witnessing a rise in asset base for the past many quarters. The company currently has $1 trillion assets under management.
Banking on solid capital position, the company continually increases dividend as well as buys back shares. The stock has a dividend yield of 3.7%, comparing favorably with the industry average of 1.9%. It targets dividend payout between 40% and 50%. It also has a 15 million share buyback authorization.
The company carries Value Score of A. The Value Style Score helps to find most attractive value stocks. Back-tested results show Value Score of A or B when combined with Zacks #1 (Strong Buy) or 2, offers best investment opportunities.
The Zacks Consensus Estimate for 2019 and 2020 earnings indicates 1.6% and 8.7% growth, respectively, from the year-ago reported figure.
Other Stocks to Consider
Other top-ranked life insurance stocks are Health Insurance Innovations, Inc. HIIQ, Primerica, Inc. PRI, and American Equity Investment Life Holding Company AEL each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Health Insurance Innovations operates as a cloud-based technology platform and distributor of individual and family health insurance plans and supplemental products in the United States. It pulled off a four-quarter average beat of 24.69%.
Primerica distributes financial products to middle-income households in the United States and Canada. The company delivered an average four-quarter positive surprise of 3.64%.
American Equity Investment develops and sells fixed index and fixed rate annuity products in the United States. The company came up with an average four-quarter positive surprise of 11.28%.
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