Is it a good company at a reasonable price? I still think that this is a good company and I intend to hold on to my current shares. The main problem that long term holders of this stock had was that interest rates, after I bought this stock, went to zero and sometimes negative. All insurance companies had a hard time with such low interest rates. I think the stock price currently maybe a bit pricy.
I own this stock of Manulife Financial Corp (TSX-MFC, NYSE-MFC). In May 2005, I was look for good companies to buy at a reasonable price. This stock met my criteria. I bought some more stock in October 2005. I had some more money to spend and wanted to buy stock of dividend paying company I owned, for which I did not own too much. In April 2009, I was looking for something else to buy and Manulife was at a good price. In April 2013, I need to buy higher dividend stocks for my RRIF account. There was some money after RRSP sales, so I bought more MFC.
When I was updating my spreadsheet, I noticed I bought this stock at the wrong time. I paid too much for my original purchase in 2005, some 20 years ago, and that is why my return is low. My total return is 6.09% per year with 3.60% from capital gains and 2.49% from dividends. I am not selling because this is a good company. If you look at the Total Return chart in a paragraph below, you will see that people who bought 20 years ago have a Total Return of 4.09% with 1.91% from capital gains and 2.18% from dividends. I also realized that all insurance companies had financial problems when the interest rates went to 0% and sometimes lower.
If you had invested in this company in December 2015, for $1,016.26 you would have bought 26 shares at $20.74 per share. In December 2025, after 10 years you would have received $583.10 in dividends. The stock would be worth $2,442.16. Your total return would have been $3,025.26. This would be a total return of 12.88% per year with 9.16% from capital gain and 3.72% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $20.74 | $1,016.26 | 49 | 10 | $583.10 | $2,442.16 | $3,025.26 |
The current dividend yield is moderate with dividend growth moderate. The current dividend yield is moderate (2% to 4% range) at 4.15%. The 5, 10 and historical median dividend yields are also moderate at 4.63%, 4.33% and 3.39%. The dividends have grown at a moderate rate (8% to 14% per year) at 9.5% per year over the past 5 years. The last dividend increase was in 2026 and it was for 10.2%.
The Dividend Payout Ratios (DPR) are good. The DPR for 2025 for Earnings per Share (EPS) is too high at 57% with 5 year coverage good at 46%. The DPR for 2025 for Adjusted Earnings per Share (AEPS) is good at 42% with 5 year coverage at 41%. This is the important one for Earnings. The DPR for 2025 for Cash Flow per Share (CFPS) is good at 9% with 5 year coverage at 11%. The DPR for 2025 for Free Cash Flow (FCF) is non-calculable due to a negative FCF with 5 year coverage good at 10%. (I have two FCF for 2025 of $32,105 and a negative -$2,250.) These are two far apart and make no sense.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 57.33% | 46.44% |
| AEPS | 41.81% | 40.76% |
| CFPS | 9.19% | 10.88% |
| FCF | 0.00% | 10.20% |
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2025 is good at 0.51 and currently at 0.55. However, we need also to look at the Long Term Debt/Covering Assets Ratio for 2025 which is good at 0.09 and currently at 0.09 because this is an important ratio for a financial. The Liquidity Ratio for 2025 is too low at 0.98 and 0.98 currently. If you added in Cash Flow after dividends, the ratios are fine at 1.99 and currently at 1.98. The Debt Ratio for 2025 is fine for a financial at 1.05 and 1.05 currently. The Reported Leverage for 2025 is fine at 23.9%.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R A | 0.09 | 0.09 |
| Lg Term R | 0.51 | 0.55 |
| Intang/GW | 0.15 | 0.16 |
| Liquidity | 0.98 | 0.98 |
| Liq. + CF | 1.99 | 1.98 |
| Debt Ratio | 1.05 | 1.05 |
| Leverage Rep | 23.90% | 23.90% |
The Total Return per year is shown below for years of 5 to 26 to the end of 2025. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2020 | 5 | 9.46% | 21.78% | 17.09% | 4.70% |
| 2015 | 10 | 9.98% | 12.88% | 9.16% | 3.72% |
| 2010 | 15 | 8.47% | 10.55% | 7.37% | 3.18% |
| 2005 | 20 | 5.71% | 4.09% | 1.91% | 2.18% |
| 2000 | 25 | 8.88% | 5.30% | 3.06% | 2.24% |
| 1999 | 26 | 8.88% | 10.26% | 6.70% | 3.56% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 9.11, 10.17, and 11.22. The corresponding 10 year ratios are 8.53, 9.99 and 11.45. The corresponding historical ratios are 10.82, 13.74 and 15.86. The current ratio is 10.53 based on a stock price of $46.73 and EPS estimate for 2026 of $4.44. The current ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 7.11, 7.93 and 9.00. The corresponding 10 year ratios are 6.96, 8.14, 10.01. The corresponding historical ratios are 7.32, 9.91 and 11.95. The current ratio is 10.23 based on a stock price of $46.73 and AEPS estimate for 2026 of $4.57. The current ratio is above high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $51.62. The 10-year low, median, and high median Price/Graham Price Ratios are 0.52, 0.63 and 0.73. The current ratio is 0.91 based on a stock price of $46.73. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Book Value per Share Ratio of 1.04. The current ratio is 1.80 based on a stock price of $46.73, Book Value of $43,461M, and Book Value per Share of $25.92. The current ratio is 74% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I also have a Book Value per Share estimate for 2026 of $28.66. This implies a ratio of 1.63 with a stock price of $46.73 and Book Value of $48,063M. This ratio is 57% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Cash Flow per Share Ratio of 2.33. The current ratio is 2.44 based on Cash Flow for the last 12 months of $32,105M, Cash Flow per Share of $19.14 and a stock price of $46.73. The current ratio is 4.8% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get an historical median dividend yield of 3.39%. The current dividend yield is 4.15% based on dividends of $1.94 and a stock price of $46.73. The current dividend yield is 22% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median dividend yield of 4.33%. The current dividend yield is 4.15% based on dividends of $1.94 and a stock price of $46.73. The current dividend yield is 4% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.
The 10-year median Price/Sales (Revenue) Ratio is 0.89. The current P/S Ratio is 1.38 based on Revenue estimate for 2026 of $56,641M, Revenue per Share of $33.78 and a stock price of $46.73. The current ratio is 55% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
Results of stock price testing is that the stock price is probably on the expensive side. However, it is off it recent high. The 10 year median dividend yield test says it is reasonable but above the median. It is not confirmed by the P/S Ratio test that says the stock price is expensive. Most of the rest of the testing is saying that the stock price is either reasonable but above the median or expensive.
When I look at analysts’ recommendations, I find Strong Buy (6), Buy (4), Hold (4) and Underperform (1). The consensus would be a Buy. The 12 months stock price consensus is $54.71 with a high of $59.00 and a low of $41.70. The consensus stock price of $54.71 implies a total return of $21.23% with 17.08% from capital gains and 4.15% from dividends based on a current stock price of $46.73.
Analysts in 2026 on Stock Chase give a couple of Weak Buys and a Hold. Sneha Nahata on Motley Fool thinks this is a good stock to buy and hold 5 years. She says that overall, Manulife’s diversified operations, strong insurance growth, expanding presence in Asia, higher dividend payments, and share repurchases make it an attractive long-term stock. Kay Ng on Motley Fool says to buy this company along with BCE and Loblaws for your TFSA this year for a balance approach. The company put out a press release via Newswire about their fourth quarter of 2025.
Simply Wall Street via Yahoo Finance says the fair value for this stock is $54.67 and therefore the stock is undervalued. Simply Wall Street has no warnings out on this stock. It gives the stock 3 and one half stars out of 5.
Manulife Financial is one of the Big Three Canadian life insurers. The firm provides life insurance, annuities, asset management, and wealth management products to individuals and group customers in Canada, the United States, and Asia. Its web site is here Manulife Financial Corp .
The last stock I wrote about was about was Canadian Tire Corp (TSX-CTC.A, OTC-CDNAF) ... learn more. The next stock I will write about will be Bombardier Inc (TSX-BBD.B, OTC-BDRBF) ... learn more on Wednesday, March 18, 2026 around 5 pm. Tomorrow on my other blog I will write about Fourth Quarter Reports.... learn more on Tuesday, March 17, 2026 around 5 pm.
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