Thursday, June 24, 2010

Sun Life Financial Inc

I have this stock (TSX-SLF) in two different accounts. For one account, I bought shares in 2001 and then again, in 2006 and in this account I have lost some 3% per year. In the other account, I bought in 2000, 2001 and again in 2003. For this account, I have made a total return of 7.6% per year. Overall, I have made a return of 4% per year on this stock.

This is a dividend paying stock, but it is no longer on any dividend list that I follow, as the company has not raised their dividend 2008. This company had previous had a good record of dividend increases and the growth in dividends over the last 5 and 10 years was 10.8% and 11.6% per year respectively. The company has been hit hard by this recession (and by the last recession). The payout from cash flow has been decreasing in the last couple of years to a more reasonable level, so there is more hope of an increase in the future.

For this company, growth figures are ok and generally, the 10 year growth figures are better than the 5 year ones. Book Value growth has been better than most, with the 5 and 10 year growth figures at 4.8% and 8.2% per year, respectively. The important cash flow and revenue growth has been minimal, but both these items picked up well for the year ending in 2009. These are the items that must pick up for this stock to do better in the future.

The Asset/Liability ratio is ok at 1.17. This is pretty typical for an insurance company, as is the Leverage at 6.88. The Return on Equity has not been great over the last couple of year with 2008 and 2009 years being at 4.9% and 3.6% respectively. However, ROE has picked up for the 1st quarter of 2010 to be 9.8%. This is also a good sign.

I think this stock will prove to be a good long term investment and I intend to continue to hold the shares I own. I will not be adding to my shares as I feel that I have enough exposure to this company, to Insurance Companies and to the Financial Services sector in general. Tomorrow, I will look at what analysts say about this company.

This is an insurance company. It provides a diverse range of protection and wealth management products and services to individuals and corporate customers. It operates internationally. Its web site is here Sun Life. See my spreadsheet at slf.htm

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.

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