Wednesday, May 11, 2011

Sun Life Financial Inc

I first bought this stock (TSX-SLF) in 2000 and then some more 2001, 2003 and 2006. I have made a total return to date of 4.4% per year on this stock. Of this total return, probably 3% per year is from dividends. Of course, part of the reason I have done so well, comparatively, is because I bought in 2000 before the price rose that year. Most insurance companies have been hit hard by this recent recession and they have yet to fully recover.

The only growth figures that are any good are for dividend increases, with the 5 and 10 year growth at 7.8% and 11.6% per year, respectively. The other thing to mention, of course, is that this company has not raised it dividend rates since 2008. Their payout ratios are getting much better and it is expected that they will start to raise their dividends again over the next few years.

Most of the other growth figures are low or non-existent. However, some of the 10 year growth figures are low, but not terrible. For example, the growth in earnings over the past 10 years is 6.4% per year and the growth in book value over the past 10 years is 6% per year. Also, the growth in revenue over the past 10 years is 4.3%. The 5 year growth for both revenue and book value is around 2%, and therefore very low. The growth in earnings is negative over the past 5 years.

The growth in cash flow for both the last 5 years and 10 years is negative. Also, total return growth is negative for the past 5 years and just under 2% (less than the dividend payments) over the past 10 years. This has not been a very profitable company recently. However, I am a long term investor, and it is expected that insurance company, and in particular, this one, will recover over the next few years.

I plan to continue to how the stock I have in this company at the present time. As I had said, the last recession hit insurance companies quite hard, but they will recover. I think that this will be a good long term investment for me. It just will take sometime before I make some decent money from it. In the meantime, I am collecting dividends, with a yield of 4.7%.

Sun Life Financial is a leading international financial services organization providing a diverse range of protection and wealth accumulation products and services to individuals and corporate customers. Chartered in 1865, Sun Life Financial and its partners today have operations in key markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda. 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.

No comments:

Post a Comment