Sun Life Financial Inc 2

On my other blog I am today writing about Dividend Growth Companies ...continue...

I own this stock of Sun Life Financial Inc. (TSX-SLF, NYSE-SLF). I first bought it in 2000 when it became a public company, although I have known this company for a longer period. I have not made much money, especially lately, under this company. I have made a total return of 3.8% per year, with 4.23% per year from dividends and a capital loss of 0.43% per year.

When I look at insider trading, I find insider selling of $6.3M and net insider selling at $5.8M. There is a bit of insider buying at 0.5M. Insider selling seems to be of options and buying seems to be under the company plan. There are a number of different options types with this company called Units Performance Share Units, Units Restricted Share Units, Units Sun Shares and Deferred Share Units besides options.

The CEO has shares worth $0.5M and has options are worth $42.6M. The CFO has some shares worth $0.1M and has options worth $13.7M. An officer has shares $0.5M and has options worth $11.4M. A director has shares worth $0.3M and has options worth $0.2M. This is just to give you an idea on insider share ownership and option values.

The 5 year low, median and high median Price/Earnings Ratios are 8.75, 10.40 and 12.05. The current P/E is 10.08 based on a current stock price of $27.57 and 2013 earnings of $2.57. (The 2013 earnings exclude the loss on sale of US Annuity Business as this gives a more realistic picture.)

I get a Graham Price of $35.91 and 10 year low, median and high median Price/Graham Price Ratio of 0.73, 0.96 and 1.06. The current P/GP Ratio is 0.77. (This calculation also uses 2013 earnings excluding loss on sale of US Annuity Business.) Both of these tests show that the stock price is reasonable.

I get a 10 year Price/Book Value per Share Ratio of 1.28 and a current P/B Ratio of 1.23. The current ratio is 96% of the 10 year ratio and suggests a reasonable stock price. The 5 year median Dividend Yield 5.44% and the current dividend yield is 5.22%. The current yield is 4% lower than the 5 year median dividend yield and suggests a reasonable stock price.

When I look at the analysts' recommendation I find recommendations of Buy, Hold and Underperform. Most of the recommendations are a Hold and the consensus recommendation is a Hold. The 12 month stock price consensus is $29.80. This implies a total return of 13.31%, with 8.09% from capital gains and 5.22% from dividends.

This article talks about the sale of US Annuities business and why there might be an earnings hit because of this sale. A number of analysts talk about how this company will do well when interest rates start to raise. (They will rise, eventually.)

I find very little recent information by analysts on this stock. No one seems to be talking much about Life Insurance companies. They have not done much over the last while and probably will not do much until interest rates start to rise. It might be more tempting stock if stock price was cheap, but it is not, it is just reasonable. See my spreadsheet at slf.htm.

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.

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 or StockTwits.