Sun Life Financial Inc

Yesterday I bought some Canadian Natural Resources (TSX-CNQ) for the TFSA account. This stock is even cheaper than when I bought it recently. I have room in the TFSA for another deposit from my Trading Account.

Sound bite for Twitter is: Dividend Growth Financial. Results of stock price testing is that the stock price is probably reasonable. Debt Ratios are fine. The Dividend Payout Ratios (DPR) are fine. The current dividend yield is moderate with dividend growth moderate. See my spreadsheet on Sun Life Financial Inc.

Is it a good company at a reasonable price? You would buy this company for diversification and because it would probably provide sold returns. I believe a sold return is around 8% per year over the longer term and this return would be split between capital gains and dividends. This stock has performed as I expected and I have happy with it. Currently the stock price is reasonable. Since we are probably in a bear market, there are probably better deals on stocks that have gone cheap with this bear market.

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 I have done fine with this company. I have had this company for 25 years and I have made 8.09% per year with 4.66% from capital gains and 3.43% from dividends. This is basically what I would expect from an Life Insurance company.

If you had invested in this company in December 2014, for $1,006.08 you would have bought 24 shares at $41.92 per share. In December 2024, after 10 years you would have received $537 in dividends. The stock would be worth $2,048.70. Your total return would have been $2,585.40. This would be a total return of 11.12% per year with 7.37% from capital gain and 3.75% from dividends.

Cost	Tot. Cost	Shares	Years	Dividends	Stock Val	Tot Ret
$41.92	$1,006.08	24	10	$537.00	$2,048.40	$2,585.40

The current dividend yield is moderate with dividend growth moderate. The current dividend yield is moderate (2% to 4% range) at 4.27%. The 5, 10 and historical dividend yields are also moderate at 4.31%, 3.91% and 3.67%. The dividend growth is moderate (8% to 14% per year) at 9.1% per year over the past 5 years. The last dividend increase was in 2024 and it was for 3.7%. Note that there is often more than one increases a year for this company.

The Dividend Payout Ratios (DPR) are fine. The DPR for 2024 for Earnings per Share (EPS) is high but fine at 62% with 5 year coverage at 51%. The DPR for 2024 for Adjusted Earnings per Share (AEPS) is good at 48% with 5 year coverage at 44%. The DPR for 2024 for Cash Flow per Share (CFPS) is high at 73% with 5 year coverage fine at 44%. The DPR for 2024 for Free Cash Flow 1 (FCF 1) is non-calculable due to negative FCF with 5 year coverage too high at 947%. The DPR for 2024 for Free Cash Flow 2 (FCF 2) is good at 18% with 5 year coverage good at 17%. (There is great disagreement on FCF.)

Item	Cur	5 Years
EPS	61.60%	50.94%
AEPS	48.65%	43.64%
CFPS	73.44%	44.16%
FCF 1	-503.08%	946.55%
FCF 2	18.00%	17.03%

Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2024 is high at 3.28 and currently at 3.68. However, we need also to look at the Long Term Debt/Covering Assets Ratio for 2024 which is good at 0.85 and currently at 0.85 because this is a more important ratio for a financial. The Liquidity Ratio for 2024 is good at 1.78 and 1.78 currently. The Debt Ratio for 2024 is low at 1.08 and 1.08 currently. This tends to be low for financials. The Leverage Ratio for 2024 are fine at 20.1% and currently at 20.1% as given by the company.

Type	Year End	Ratio Curr
Lg Term R+A	0.85	0.85
Lg Term R	3.28	3.68
Intang/GW	0.30	0.33
Liquidity	1.78	1.78
Liq. + CF	1.85	2.06
Debt Ratio	1.08	1.08
Leverage Co	20.1%	20.1%

The Total Return per year is shown below for years of 5 to 25 to the end of 2024. 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 chart below.

From	Years	Div. Gth	Tot Ret	Cap Gain	Div.
2019	5	9.06%	10.66%	7.59%	3.07%
2014	10	8.45%	11.12%	7.37%	3.75%
2009	15	5.56%	11.05%	7.16%	3.89%
2004	20	6.86%	6.80%	3.84%	2.96%
1999	25	7.94%	12.42%	7.92%	4.51%

The 5-year low, median, and high median Price/Earnings per Share Ratios are 10.36, 12.44 and 14.17. The corresponding 10 year ratio is 10.41, 12.15 and 13.69. The corresponding historical ratios are 11.51, 13.13 and 14.33. The current P/E Ratio is 11.34 based on a stock price of $78.67 and EPS estimate for 2025 of $6.94. This ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Earnings per Share Ratios are 9.35, 10.31 and 11.84. The corresponding 10 year ratio is 9.43, 10.45 and 12.00. The corresponding historical ratios are 9.62, 11.07, and 12.41. The current P/AEPS Ratio is 10.73 based on a stock price of $78.67 and AEPS estimate for 2025 of $7.33. This ratio is between the median and high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a Graham Price of $81.55. The 10-year low, median, and high median Price/Graham Price Ratios are 0.73, 0.84 and 0.96. The current ratio is 0.99 based on a stock price of $78.67. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.

I get a 10-year median Price/Book Value per Share Ratio of 1.50. The current ratio is 1.95 based on a Book Value of $23,157, Book Value per Share of $40.35 and a stock price of $78.67. The current ratio is 30% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

I also have Book Value per Share estimate for 2025 of $43.68, but this analyst calculated the Book Value differently than I do and under this method the 10 year Price/Book Value per Share Ratio of 1.28. The BVPS estimate of $43.68 implies a ratio of 1.80 with a stock price of $78.67 and a Book Value of $25,068. This ratio of 1.80 is 41% above the 10 year median ratio of 1.28. This stock price testing suggests that the stock price is relatively expensive.

I get a 10-year median Price/Cash Flow per Share Ratio of 7.65. The current ratio is 9.08 based on CFPS estimate for 2025 of $8.66, Cash Flow of $4,970 and a stock price of $78.67. The current ratio is 18.8% 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 3.67%. The current yield is 4.27% based on a stock price of $78.67 and dividends of $3.36. The current dividend yield is 16% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get an historical median dividend yield of 3.91%. The current yield is 4.27% based on a stock price of $78.67 and dividends of $3.36. The current dividend yield is 9% 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 0.97. The current ratio is 0.94% based on Revenue estimate for 2025 of $48,080, Revenue per Share of $83.78 and a stock price of $78.67. The current ratio is 3.6% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

Results of stock price testing is that the stock price is probably reasonable. The dividend yield tests say this and it is confirmed by the P/S Ratio test. The rest of the testing range from reasonable to expensive.

When I look at analysts’ recommendations, I find Strong Buy (4), Buy (6), and Hold (4). The consensus would be a Buy. The 12 months stock price consensus is $87.46 with a high of $96.00 and low of $72.00. the consensus 12 month stock price implies a total return of 15.44% with 11.17% from capital gains and 4.27% from dividends based on a current stock price of $78.67.

Analysts’ recommendations on Stock Chase varies for 2025 with earlier ones hold and latest one buy on weakness. Christopher Liew on Motley Fool believes this stock is a good investment with an attractive dividend yield. Kay Ng on Motley Fool says Sun Life offers a combination of stability and growth potential. The company put out a press release via Newswire about their results for their fourth quarter of 2025.

Zacks via Yahoo Finance reviews this stock and thinks investors should wait for a better entry point. Simply Wall Street has no warnings out on this stock.

Sun Life provides life insurance, retirement, and asset management products to individuals and corporate customers in Canada, the United States, and Asia. Its web site is here Sun Life Financial Inc.

The last stock I wrote about was about was Goodfellow Inc (TSX-GDL, OTC-GFELF) ... learn more. The next stock I will write about will be Alaris Equity Partners Income Trust (TSX-AD.UN, OTC-ALARF) ... learn more on Friday, April 11, 2025 around 5 pm. Tomorrow on my other blog I will write about Addicted to Conflict.... learn more on Thursday, April 11, 2025 around 5 pm.

This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. 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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