Manulife (MFC) Seeks Growth on Organic and Inorganic Routes
On Sep 26, we issued an updated research report on Manulife Financial Corp. (MFC)
Manulife Financial is a Canadian insurance company and is among the top ranked players in the region. To further accelerate its growth strategy for its Canadian business, earlier in the month, the company announced that it will acquire Standard Life Overseas Holdings of Standard Life plc.
The acquisition will enhance the scale of the company’s core businesses – Group Retirement, Mutual Funds and Group Benefits.
Outside Canada, the company has been consistently pursuing sustainable growth in Asia, Wealth Management, and the United States.
The company’s wealth and asset under management business is performing strongly, with fund under management swelling up over the past 23 quarters consecutively. Manulife Asset Management ranks as the 30th largest asset manager globally.
Manulife also continues to target sustainable earnings and tap opportunistic growth in the U.S. With strong mutual fund sales and funds under management; John Hancock Investments – a unit of Manulife – is one of the fastest growing mutual fund companies in the U.S., significantly outpacing the industry’s organic growth rate.
Its presence in Asia, which dates back to over a century ago, gives it a competitive advantage. Changing demographics have fueled demand for insurance and wealth management products in this region and the company will likely benefit from this owing to its longstanding presence and reliability. The region has also attracted other players like Prudential Financial Inc. (PRU), MetLife, Inc. (MET) and Sun Life Financial Inc. (SLF).
The company boasts a strong balance sheet with a moderate leverage ratio and strong cash flow. Recently, the company announced that it will increase quarterly dividend by 19%.
During the last reported quarter, Manulife Financial reported core earnings of $642.5 million (C$701 million), up 15.1% year over year. The improvement was driven by higher fee income on increased asset under management, lower hedging costs and a favorable U.S. currency impact.
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