Thursday, May 5, 2011

Sun Life Financial (SLF) Dividend Stock Analysis

Sun life is primarily a life insurance company but like many of its peers, it operates in the financial sector by providing other services such as retirement and wealth management in many countries.

Their primary goal is your financial well being.

Quick Facts

  • Stock Ticker: SLF on both TSX and NYSE
  • Market Cap.: 17.66B$
  • P/E: 11.15
  • Forward P/E: 10.27
  • P/B: 1.08
  • EPS: $2.76
  • Beta: 1.16
  • Liabilities to Equity Ratio: 10.43
  • Quarterly Dividends: $0.36
  • Dividend Yield: 4.69%
  • Dividend Payout Ratio: 51.25%
  • ROE: 9.64%
  • 5 Year EPS Growth Average: 30.63%
  • 5 Year Dividend Growth Average: 5.80%
  • 52-Week Low: $23.58
  • 52-Week High: $34.39
  • 52-Week Range: 66.14%
The insurance sector has certainly not recovered yet when you look at the 5 year chart. The one year chart is looking at moving up and based on the numbers above, it may be time to start looking into the insurance companies and more specifically Sun Life Financial.

[caption id="" align="aligncenter" width="400" caption="1 Year Stock Chart"]SLF Dividend Stock Analysis[/caption]

[caption id="" align="aligncenter" width="400" caption="5 Year Stock Chart"]SLF Dividend Stock Analysis[/caption]

 


Dividend Growth

Sun Life is showing a nice trend in its dividend growth. It's 5 year dividend growth average isn't stellar with 5.80% but you need to realized that they did not really reduce their dividends in the financial crisis unlike some other competitors.

SLF Dividend Growth

Dividend Payout Ratio

The historical dividend payout ratio is amazingly flat when you factor out the financial crisis timeline. I am actually quite impressed with that. It's a 32% payout on average and 2010 moved closer to that ratio with 51%.

SLF Dividend Payout Ratio

EPS Growth

Historical growth was nice and allowed Sun Life to grow their dividend and maintain a relatively fixed dividend growth.

SLF EPS Growth

Thoughts

Management seem to execute quite well. No major dividend cuts during the financial crisis. They weathered the storm and rewarded the investors by maintaining their dividends and 2010 is showing promise that the company is back on track. They are not overlay diversified in too many sectors which should allow them to streamline their different businesses to optimize their profits.

They aren't the major players and that's probably why they weathered the storm better than Manulife, which lost big. The major competitors in Canada are Great West LifeCo and Manulife.

Full Disclosure: Long SLF.
Disclaimer: The material presented should not be considered a recommendation. You should always do your own research and reach your own conclusion.

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1 comment:

  1. This looks like an interesting purchase. Would you still consider it as an addition to your income portfolio at current prices?

    ReplyDelete

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