MANULIFE FINANCIAL CORP (MFC.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:MFC - CA56501R1064 - Common Stock
50.65 CAD
+0.03 (+0.06%)
MFC gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 80 industry peers in the Insurance industry. MFC has only an average score on both its financial health and profitability. MFC has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
- MFC had positive earnings in the past year.
- In the past year MFC had a positive cash flow from operations.
- MFC had positive earnings in 4 of the past 5 years.
- In the past 5 years MFC always reported a positive cash flow from operatings.
1.2 Ratios
- MFC has a Return On Assets (0.53%) which is comparable to the rest of the industry.
- MFC has a Return On Equity of 10.48%. This is in the lower half of the industry: MFC underperforms 77.50% of its industry peers.
- MFC has a Return On Invested Capital (0.75%) which is comparable to the rest of the industry.
| 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
- MFC has a Profit Margin of 13.87%. This is amongst the best in the industry. MFC outperforms 81.25% of its industry peers.
- 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.
- In the last couple of years the Operating Margin of MFC has grown nicely.
| 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
- MFC has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- The number of shares outstanding for MFC has been reduced compared to 1 year ago.
- Compared to 5 years ago, MFC has less shares outstanding
- MFC has a better debt/assets ratio than last year.
2.2 Solvency
- MFC has a debt to FCF ratio of 0.44. This is a very positive value and a sign of high solvency as it would only need 0.44 years to pay back of all of its debts.
- Looking at the Debt to FCF ratio, with a value of 0.44, MFC belongs to the top of the industry, outperforming 82.50% of the companies in the same industry.
- MFC has a Debt/Equity ratio of 0.26. This is a healthy value indicating a solid balance between debt and equity.
- Looking at the Debt to Equity ratio, with a value of 0.26, MFC is in the better half of the industry, outperforming 76.25% of the companies in the same industry.
| 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
- MFC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.55%, which is quite good.
- The Earnings Per Share has been growing slightly by 5.49% on average over the past years.
- 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.
- Based on estimates for the next years, MFC will show a quite strong growth in Revenue. The Revenue will grow by 11.90% on average per year.
EPS Next Y8.22%
EPS Next 2Y8.36%
EPS Next 3Y8.8%
EPS Next 5Y5.15%
Revenue Next Year8.86%
Revenue Next 2Y8.68%
Revenue Next 3Y6.97%
Revenue Next 5Y11.9%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
- 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.
- Compared to the rest of the industry, the Price/Earnings ratio of MFC indicates a slightly more expensive valuation: MFC is more expensive than 70.00% of the companies listed in the same industry.
- Compared to an average S&P500 Price/Earnings ratio of 27.21, MFC is valued rather cheaply.
- A Price/Forward Earnings ratio of 11.12 indicates a reasonable valuation of MFC.
- 62.50% of the companies in the same industry are cheaper than MFC, based on the Price/Forward Earnings ratio.
- When comparing the Price/Forward Earnings ratio of MFC to the average of the S&P500 Index (24.26), we can say MFC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.26 | ||
| Fwd PE | 11.12 |
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.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of MFC indicates a somewhat cheap valuation: MFC is cheaper than 63.75% of the companies listed 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)1.49
PEG (5Y)2.23
EPS Next 2Y8.36%
EPS Next 3Y8.8%
5. Dividend
5.1 Amount
- MFC has a Yearly Dividend Yield of 3.48%. Purely for dividend investing, there may be better candidates out there.
- With a Dividend Yield of 3.48, MFC pays less dividend than the industry average, which is at 4.15. 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 1.82.
| 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
- MFC pays out 60.48% of its income as dividend. This is not a sustainable payout ratio.
- The dividend of MFC is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP60.48%
EPS Next 2Y8.36%
EPS Next 3Y8.8%
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 8.22% in the next year.