May 12th, 2011 | 
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Sun life is primarily a life insurance company but like many of its peers, it operates in the financial sector by providing other services such as retirement and wealth management in many countries.
Their primary goal is your financial well being.
Quick Facts
- Stock Ticker: SLF on both TSX and NYSE
- Market Cap.: 17.66B$
- P/E: 11.15
- Forward P/E: 10.27
- P/B: 1.08
- EPS: $2.76
- Beta: 1.16
- Liabilities to Equity Ratio: 10.43
- Quarterly Dividends: $0.36
- Dividend Yield: 4.69%
- Dividend Payout Ratio: 51.25%
- ROE: 9.64%
- 5 Year EPS Growth Average: 30.63%
- 5 Year Dividend Growth Average: 5.80%
- 52-Week Low: $23.58
- 52-Week High: $34.39
- 52-Week Range: 66.14%
The insurance sector has certainly not recovered yet when you look at the 5 year chart. The one year chart is looking at moving up and based on the numbers above, it may be time to start looking into the insurance companies and more specifically Sun Life Financial.
1 Year Stock Chart
5 Year Stock Chart
Dividend Growth
Sun Life is showing a nice trend in its dividend growth. It’s 5 year dividend growth average isn’t stellar with 5.80% but you need to realized that they did not really reduce their dividends in the financial crisis unlike some other competitors.
Dividend Payout Ratio
The historical dividend payout ratio is amazingly flat when you factor out the financial crisis timeline. I am actually quite impressed with that. It’s a 32% payout on average and 2010 moved closer to that ratio with 51%.
EPS Growth
Historical growth was nice and allowed Sun Life to grow their dividend and maintain a relatively fixed dividend growth.
Thoughts
Management seem to execute quite well. No major dividend cuts during the financial crisis. They weathered the storm and rewarded the investors by maintaining their dividends and 2010 is showing promise that the company is back on track. They are not overlay diversified in too many sectors which should allow them to streamline their different businesses to optimize their profits.
They aren’t the major players and that’s probably why they weathered the storm better than Manulife, which lost big. The major competitors in Canada are Great West LifeCo and Manulife.
Full Disclosure: Long SLF.
Nice post. I like SLF. I also like their move into Asia; more diversification. SLF is fairly well-managed and I think after another year, they will be poised to raise their dividend. Definitely long SLF for me, I hold some in my TFSA and my unregistered portfolio.
My Own Advisor recently posted..My Top Stress Busters
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As always a great post, nice work.
i am looking to add some more financials and was looking at this and Great West.
NeilM
dividendnoob.blogspot.com
Thanks for the compliment.
I like Great West. I started with Sun Life for now with respect to Life Insurance, it’s mostly focused in Canada and it has a better yield. If you like Great West, make sure you look at POW and PWF since they own GWO and it may fit better your portfolio.
[...] Sun Life (SLF) [...]
Great post.
I just bought some SLF for my TFSA portfolio too. I might be adding some more too it.
I’m happy that they didnt’ reduce their dividend like Manulife did.
youngandthrifty recently posted..Pursuing a Higher Education after Entering the Job Market- Is it Worth It
[...] Interestingly enough, Sun Life and Great West LifeCo both have a similar yields with a good history of dividend growth. Comparing them to each other, GWO would be the winner from a growth perspective over the past 10 years. [...]