Sun Life Financial Inc.

I own this stock of Sun Life Financial Inc. (TSX-SLF, NYSE-SLF). After I sold my CIBC bond I had money to buy some stocks so I made a hit list and looked for ones on this list selling at a reasonable price. This stock was selling at a reasonable price.

Insurance companies are still having a hard time. This will continue until interest rates go to a more normal level and it is hard to say when that will be. For my investment in this company I have made a return of 6.13% with 3.83% from dividends and 2.3% from capital gains.

As with other insurance companies, this company has not raised their dividends since 2008. The dividend payout ratios are reasonable at 55.6% for EPS and 31.2% for CFPS.

The 5 and 10 year total return on this stock has not been much with the 5 and 10 year total returns at 7.22% and 2.31% per year. The portion of these returns from dividends is 3.34% and 3.24% per year over the past 5 and 10 years. The portion of these returns from capital gains is at 3.88% per year over the past 5 years and a loss of 0.92% per year over the past 10 years. Note that over the past two years, the stock price has increased by over 42% each year.

Of course the beauty of dividend paying stock is that you tend not to lose much over the longer timer because of the dividends.

The outstanding shares have increased marginally over the past 5 and 10 years at 1.7% and 0% per year. Revenues, earnings and cash flows are all down over the past 5 and 10 years. Analysts last year thought 2013 would be a better year for this stock. Now they think that 2014 will be a better year.

Revenue per Share is down by 3.9% and 4.7% per year over the past 5 and 10 years. Earnings are up by 2.5% per year over the past 5 years, but down by 3.22% per year over the past 10 years. Cash Flow per Share is down by 20% and 15% per year over the past 5 and 10 years.

The Return on Equity is also low, coming in at just 6.1% for 2013 and with a 5 year median ROE of 6.1%. A brighter story is that the comprehensive income was better than net income and has an ROE or 10.7% for 2013 with a 5 year median value of 8.2%.

The Liquidity Ratio at 1.97 for 2013 is good and this ratio has always been good. The Debt Ratio is low at 1.10, but this is better than a lot of finance companies. The Leverage and Debt/Equity Ratios at 11.50 and 10.50 are normal for this company and lower than some other financial companies.

I believe that this stock will recover and again become a dividend growth stock. I just do not know when this will occur. See my spreadsheet at slf.htm.

This is the first of two parts. The second part will be posted on Wednesday, April 9, 2014 and will be available here. The first part talks about the stock and the second part talks about the stock price.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

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