Why Should You Stay Invested in Sun Life (SLF) Stock Now?
Sun Life Financial SLF is well-poised for growth given its focus on Asia operation, growing asset management businesses and a strong financial position. These factors, coupled with favorable growth estimates, make SLF worth retaining in one’s portfolio.
Sun Life has a decent track record of beating the Zacks Consensus Estimate for earnings in three of the last four quarters, the average being 3.98%. The company’s earnings grew 7.6% in the last five years, better than the industry average of 2.1%.
It has a VGM Score of B.
Zacks Rank & Price Performance
Sun Life currently carries a Zacks Rank #3 (Hold). Year to date, the stock has gained 8.4% compared with the industry’s increase of 11.1%.
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Optimistic Growth Projections
The Zacks Consensus Estimate for Sun Life’s 2024 earnings is pegged at $5.00 per share, suggesting growth of 9% year over year. The expected long-term earnings growth rate is 8%. Sun Life targets bottom-line growth of 8-10% per annum over the medium term.
Business Tailwinds
Sun Life stays focused on continually strengthening its presence in the Asia market, which provides higher returns and growth than the North American markets. The contribution of Asia to Sun Life’s earnings has increased to 21% from 8% over the last few years.
The life insurer is improving its business mix and thus shifting its growth focus toward products that park lower capital and offer more predictable earnings. Sun Life looks to be one of the top five players and remains focused on growing its voluntary benefits business. The life insurer is also increasing its spending on growth initiatives.
In its effort to strengthen Asset Management, Sun Life Investment Management makes investments in private fixed-income, mortgages and real estate. It invests in pension plans and other institutional investors. Notably, Asset Management provides a higher return on equity, lower capital and volatility and has the potential for an earnings upside.
Sun Life also invests in the private credit domain, which ensures a greater yield, thus creating an opportunity to generate higher income.
Banking on operational expertise, Sun Life has built a strong capital position. It targets a leverage ratio of 25% over the long term. The life insurer’s capital outlay includes a 40-50% dividend payout over the medium term. Given the company’s ongoing shift to fee-based capital-light businesses, it reiterated its medium-term ROE target of 18%.
Stocks to Consider
Some better-ranked stocks from the insurance industry are F&G Annuities & Life, Inc. FG, American Equity Investment Life Holding AEL and Reinsurance Group of America RGA.
The Zacks Consensus Estimate for F&G Annuities’ 2023 and 2024 earnings has moved 0.6% and 4.8% higher, respectively, in the past 30 days. FG sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for FG’s 2023 and 2024 earnings per share indicates year-over-year increases of 6.3% and 44.2%, respectively. Year to date, FG shares have gained 110.5%.
American Equity delivered a four-quarter average earnings surprise of 13.53%. AEL currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for AEL’s 2023 and 2024 earnings per share indicates year-over-year increases of 9% and 1.4%, respectively. Year to date, AEL shares have risen 20.2%.
Reinsurance Group delivered a four-quarter average earnings surprise of 13.53%. RGA carries a Zacks Rank #2.
The Zacks Consensus Estimate for RGA’s 2023 and 2024 earnings per share has moved up 1.8% and 0.7%, respectively, in the past seven days. Year to date, RGA shares have gained 14.2%.
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American Equity Investment Life Holding Company (AEL) : Free Stock Analysis Report
Reinsurance Group of America, Incorporated (RGA) : Free Stock Analysis Report
Sun Life Financial Inc. (SLF) : Free Stock Analysis Report
F&G Annuities & Life, Inc. (FG) : Free Stock Analysis Report
