MANULIFE FINANCIAL CORP (MFC.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:MFC - CA56501R1064 - Common Stock
50.65 CAD
+0.03 (+0.06%)
Taking everything into account, MFC scores 4 out of 10 in our fundamental rating. MFC was compared to 80 industry peers in the Insurance industry. MFC has an average financial health and profitability rating. MFC has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
- MFC had positive earnings in the past year.
- MFC had a positive operating cash flow in the past year.
- MFC had positive earnings in 4 of the past 5 years.
- MFC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- MFC has a Return On Assets of 0.53%. This is comparable to the rest of the industry: MFC outperforms 48.75% of its industry peers.
- Looking at the Return On Equity, with a value of 10.48%, MFC is doing worse than 77.50% of the companies in the same industry.
- MFC has a Return On Invested Capital (0.75%) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.53% | ||
| ROE | 10.48% | ||
| ROIC | 0.75% |
ROA(3y)0.27%
ROA(5y)0.44%
ROE(3y)5.1%
ROE(5y)7.68%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
- Looking at the Profit Margin, with a value of 13.87%, MFC belongs to the top of the industry, outperforming 81.25% of the companies in the same industry.
- In the last couple of years the Profit Margin of MFC has grown nicely.
- MFC's Operating Margin of 22.75% is fine compared to the rest of the industry. MFC outperforms 78.75% of its industry peers.
- MFC's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 22.75% | ||
| PM (TTM) | 13.87% | ||
| GM | N/A |
OM growth 3Y12.84%
OM growth 5Y19.32%
PM growth 3Y3.23%
PM growth 5Y14.2%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), MFC is destroying value.
- The number of shares outstanding for MFC has been reduced compared to 1 year ago.
- MFC has less shares outstanding than it did 5 years ago.
- MFC has a better debt/assets ratio than last year.
2.2 Solvency
- The Debt to FCF ratio of MFC is 0.44, which is an excellent value as it means it would take MFC, only 0.44 years of fcf income to pay off all of its debts.
- MFC has a Debt to FCF ratio of 0.44. This is amongst the best in the industry. MFC outperforms 82.50% of its industry peers.
- A Debt/Equity ratio of 0.26 indicates that MFC is not too dependend on debt financing.
- MFC's Debt to Equity ratio of 0.26 is fine compared to the rest of the industry. MFC outperforms 76.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.26 | ||
| Debt/FCF | 0.44 | ||
| Altman-Z | N/A |
ROIC/WACC0.09
WACC8.29%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 9.55% over the past year.
- MFC shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.49% yearly.
- MFC shows a small growth in Revenue. In the last year, the Revenue has grown by 7.70%.
- Measured over the past years, MFC shows a very negative growth in Revenue. The Revenue has been decreasing by -13.62% on average per year.
EPS 1Y (TTM)9.55%
EPS 3Y6.08%
EPS 5Y5.49%
EPS Q2Q%16%
Revenue 1Y (TTM)7.7%
Revenue growth 3Y-12.52%
Revenue growth 5Y-13.62%
Sales Q2Q%21.19%
3.2 Future
- MFC is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.15% yearly.
- MFC is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 11.90% yearly.
EPS Next Y8.17%
EPS Next 2Y8.45%
EPS Next 3Y8.81%
EPS Next 5Y5.15%
Revenue Next Year8.86%
Revenue Next 2Y8.68%
Revenue Next 3Y6.97%
Revenue Next 5Y11.9%
3.3 Evolution
- The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- MFC is valuated correctly with a Price/Earnings ratio of 12.26.
- 70.00% of the companies in the same industry are cheaper than MFC, based on the Price/Earnings ratio.
- When comparing the Price/Earnings ratio of MFC to the average of the S&P500 Index (27.21), we can say MFC is valued rather cheaply.
- A Price/Forward Earnings ratio of 11.10 indicates a reasonable valuation of MFC.
- MFC's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. MFC is more expensive than 62.50% of the companies in the same industry.
- When comparing the Price/Forward Earnings ratio of MFC to the average of the S&P500 Index (25.98), we can say MFC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.26 | ||
| Fwd PE | 11.1 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, MFC is valued a bit cheaper than the industry average as 70.00% of the companies are valued more expensively.
- MFC's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. MFC is cheaper than 63.75% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 2.79 | ||
| EV/EBITDA | 7.35 |
4.3 Compensation for Growth
- The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
PEG (NY)1.5
PEG (5Y)2.23
EPS Next 2Y8.45%
EPS Next 3Y8.81%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 3.48%, MFC has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 4.42, MFC's dividend is way lower than its industry peers. On top of this 83.75% of the companies listed in the same industry pay a better dividend than MFC!
- MFC's Dividend Yield is rather good when compared to the S&P500 average which is at 1.81.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.48% |
5.2 History
- The dividend of MFC is nicely growing with an annual growth rate of 20.17%!
- MFC has been paying a dividend for at least 10 years, so it has a reliable track record.
- MFC has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)20.17%
Div Incr Years11
Div Non Decr Years14
5.3 Sustainability
- 60.48% of the earnings are spent on dividend by MFC. This is not a sustainable payout ratio.
- MFC's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP60.48%
EPS Next 2Y8.45%
EPS Next 3Y8.81%
MANULIFE FINANCIAL CORP / MFC.CA FAQ
What is the fundamental rating for MFC stock?
ChartMill assigns a fundamental rating of 4 / 10 to MFC.CA.
Can you provide the valuation status for MANULIFE FINANCIAL CORP?
ChartMill assigns a valuation rating of 4 / 10 to MANULIFE FINANCIAL CORP (MFC.CA). This can be considered as Fairly Valued.
How profitable is MANULIFE FINANCIAL CORP (MFC.CA) stock?
MANULIFE FINANCIAL CORP (MFC.CA) has a profitability rating of 5 / 10.
How financially healthy is MANULIFE FINANCIAL CORP?
The financial health rating of MANULIFE FINANCIAL CORP (MFC.CA) is 4 / 10.
What is the earnings growth outlook for MANULIFE FINANCIAL CORP?
The Earnings per Share (EPS) of MANULIFE FINANCIAL CORP (MFC.CA) is expected to grow by 8.17% in the next year.