Tuesday, May 15

Dividend Stock I'm Watching: MFC

Well, now that I have satisfied my urge to spend, I'm looking around and not seeing too many other stocks that look nice to me. There is one that has caught my eye though...

What it is:
Manulife Financial (MFC) - one of Canada's biggest insurance companies; also has US and international operations

Why I'm watching it:

  • It's a dividend payer and consistent dividend raiser.
  • MFC just raised their dividend 10%, Q1 earnings were within 1 penny of estimates, most analysts have it rated as a buy or better, and yet the stock keeps going down.
  • On Monday the other insurers that I watch (SLF, GWO) were up, but MFC was down.
It is starting to look like a good stock that is currently out of favour. Perhaps investors are overpunishing it for something.


Here are some numbers:

Closing Price (May 14): $39.20
Dividend Yield: 2.24%
P/E ratio: 15.56


And some charts...
Last year (click to enlarge):



Last month (click to enlarge):


It still looks like it has downward momentum, so I will just be watching for a while. It seems like $39 has been a support point recently but if it gets below that it could get down to around $38. At $37.75 it will be less than 15 P/E ratio, which is a number I like.

Anyway... we will wait and see!

p.s. Remember to always do your own diligence! If you want to do more reading on Manulife, check out Canadian Banks and Insurance. They have a bunch of stuff.

5 comments:

d2cold said...

Hello Money Diva,

I thought the same about BMO a while back but did not however jump on the bandwagon. I noticed your seeking yield in 'good' stocks. Far be it for me to suggest what you should try since your 'bulging' portfolio far surpasses mine! I would like to know your secrets to success. But anyways to my point. Have you considered Pfizer (PFE) or Verizon (vz)instead of WMT or HD? Has 2x the yield with good growth prospects. I also wonder if you might sell covered calls on these companies to boost your yields... yes it does limit or cap gains but these aren't huge gainers either?

Also CIBC has cheap trading fees now for available. Check their website for details.

Just my 2 cents,
DH

Thicken My Wallet said...

Good pick. MFC also has a growing Asian division which their Canadian competitors do not.

Mr. Cheap said...

Have you considered TSE:ROC (Rothmans). Stable company with long history of increasing dividends, an addictive product, and a 5.5% yield.

GIV said...

most analysts have it rated as a buy or better

I'm always inherently skeptical of that. I've worked with analysts professionally and they're very sharp and bright. So I dont' mean this as a slight, but it's exceedingly rare that an anlyst has anything less than a "hold" rating on a stock. Just pick any given analyst in any sector and I'll bet that for every 10 stocks he/she covers, no more than 2 will be "sells" 3-4 will be "buys" and the rest will be holds.

On the other hand, those analyst reports are a fountain of useful knowledge in terms of data numbers if you care to sift through.

moneygardener (AKA investor99) said...

IMO Manulife is currently a strong buy.

I believe it should be trading more in the $44-45 range. Investors seems to be pricing in a future earnings miss or downward revision, which I doubt will come. Even if they can grow EPS at 11% it is a buy at current levels. I have it as 30% undervalued according to my models. They are a fabulous company and a great dividend raiser, in and industry that I really like.

BTW Thicken - SLF has a growing Asian division as well.