I own this stock of Sun Life Financial Inc (TSX-SLF, NYSE-SLF). I first bought this stock in 2000 when it was first demutualized. It was very cheap. I bought more in 2001, 2003 and 2006. This stock was on Mike Higgs' Canadian Dividend Growth stock list and on the other dividend lists that I followed.
When I was updating my spreadsheet, I noticed that for AUM, Revenue, Earnings and Cash Flow, the per year value colors were changing from dark purple and blue to blue and green. This is a good sign.
The dividend yields on this stock are in the moderate range (2% to 4% ranges). The current dividend is 3.88%, with 5, 10 and historical dividend yields of 3.64%, 4.18% and 3.62%. There have been fluctuations in the yield with a high of 8.24% and low of 1.24%.
The dividend growth is low (below 8%). See the chart below. This company, as did all insurance companies, had a hard time since the 2008 recession. The problem was very low interest rates. Between 2008 and 2015, there were no dividend increase. The overall dividend increases for 2018 was 9.17%.
The Dividend Payout Ratios are good. The DPR for EPS for 2018 is 46% with 5 year coverage at 45%. The DPR for CFPS for 2018 is 15% with 5 year coverage at 16%.
Debt Ratios are fine. As for a bank, you want the company to cover their liabilities with assets. The ratio for this company is 0.90. I get a Liquidity Ratio of 1.82 although I know a lot of analysts do not pay any attention to the Liquidity Ratio for Life Insurance Companies. The Debt Ratio is 1.10 and this is fine for financials.
The Total Return per year is shown below for years of 5 to 19 to the end of 2018. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.
|From||Years||Div Gth||Tot Ret||Cap Gain||Div|
The 5 year low, median, and high median Price/Earnings per Share Ratios are 10.54, 11.92 and 13.38. The corresponding 10 year ratios are 10.50, 11.81 and 13.32. The corresponding historical ratios are 12.01, 13.57 and 15.09. The current P/E Ratio is 10.54 based on a stock price of $51.52 and 2019 EPS estimate of $4.89. This stock price testing suggests that the stock price is relatively reasonable and below the median. It is almost cheap.
I get a Graham Price of $61.76. The 10 year low, median, and high median Price/Graham Price Ratios are 0.73, 0.86 and 0.99. The current P/GP Ratio is 0.83 based on a stock price of $51.52. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10 year median Price/Book Value per Share Ratio of 1.39. The current P/B Ratio is 1.49 based on Book Value of $20,749, Book Value per Share of $34.67 and a stock price of $51.52. The current ratio is some 7% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get an historical median dividend yield of 3.62%. The current dividend yield is 3.88% based on dividend of $2.00 and a stock price of $51.52. The current dividend is 7% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median
The 10 year median Price/Sales (Revenue) Ratio is 0.95. The current P/S Ratio is 0.94 based on 2019 Revenue estimate of $32,788, Revenue per Share of $54.78 and a stock price of $51.52. The current ratio is below the 10 year median ratio by 1.5%. This stock price testing suggests that the stock price is relatively reasonable and below the median.
Results of stock price testing is probably reasonable and about or below the median. This is showing up in the Dividend Yield and P/S Ratio tests. The P/B Ratio test show the stock price above the median, but a P/B Ratio of 1.49 is a low P/B Ratio.
When I look at analysts’ recommendations, I find Strong Buy (1), Buy, (6), Hold (5) and Underperform (2). The consensus is a Hold. The 12 month stock price consensus is $54.67. This implies a total return of $10.00 with 6.11% from capital gains and 3.88% from dividends. It is always interesting when there is such a diversion of opinions.
See what analysts are saying about this stock on Stock Chase. Seems it is not doing as well as it should. Christopher Liew on Motley Fool thinks it is a good time to buy this stock. A writer on Simply Wall Street talks about the CEO salary. There is an interesting Guru analysis of this company on Nasdaq. Eva Fuller on the Analyst Journal talks about some recent analyst recommendations for this stock.
Sun Life Financial provides insurance, retirement, and wealth-management products and services to individual and corporate customers in Canada, the U.S., and Asia. The company focuses primarily on individual life insurance and variable annuity products in Canada but also offers group insurance and employee benefits in the U.S. and has a growing presence in the Asia-Pacific region. Sun Life also maintains a majority ownership stake in MFS Investment Management, a Boston-based asset manager. Its web site is here Sun Life Financial Inc.
The last stock I wrote about was about was BCE Inc. (TSX-BCE, NYSE-BCE) ... learn more. The next stock I will write about will be Alaris Royalty Corp (TSX-AD, OTC-ALARF) ... learn more on Wednesday, April 03, 2019 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks April 2019.... learn more on Tuesday, April 02, 2019 around 5 pm.
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