Tuesday, April 16, 2013

Sun Life Financial Inc

I own this stock of Sun Life Financial Inc. (TSX-SLF, NYSE-SLF). I have followed and invested in this company for some time. I first bought it in 2000 when it became a public company, although I have known this company for a longer period. I have worked in several Life Insurance companies, however, never at Sun Life.

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. Over the past 5 years the company's total return is a loss of 10.82% per year, with the dividends were at 3.07% per year and with a capital loss of 13.89% per year. Over the past 10 years it has done a bit better with a total return of 4.09% per year with dividends at 4.22% per year and a capital loss of 0.13% per year.

The dividends on this stock have not changed since 2008. The 5 and 10 year dividend growth is at 1.76% and 9.9% per year. However, in the current economic climate the dividend yield is quite good. Last year the dividend was averaging around 6.1%, and currently it seems to be running around 5.2%. Some analysts think that the company will raise their dividend in 2015.

The outstanding shares have not changed much over the past 5 and 10 years. The outstanding shares are up by 1.2% per year over the past 5 years and have declined by 0.3% per year over the past 10 years. Shares have increased due to stock options, DRIP and share issues. Shares have decreased due to share buy backs.

What I see is no or little growth in the last 5 and 10 years in revenue, earnings, cash flow and book value. I cannot see much changing until there is an economic improvement. On the other hand I do not think that the firm is in any financial difficulty. I think that the company is strong enough to survive the current economic problems.

Currently I am holding on to my insurance stock. I believe that I will do just fine in the long term. Of course, this all depends on how you look at things. To me, on this stock, I am earning a good dividend while I wait for the insurance sector to do better. It may be a while before the economy improves. The main problem is the low interest rates and lower interest rates will not last forever. (However, such situations can last longer than anyone believes possible.)

I am collecting my dividends and will wait for better times. 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.

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