We assign a fundamental rating of 4 out of 10 to MFC. MFC was compared to 148 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.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year MFC was profitable.
MFC had a positive operating cash flow in the past year.
Of the past 5 years MFC 4 years were profitable.
MFC had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

The Return On Assets of MFC (0.53%) is worse than 70.47% of its industry peers.
With a Return On Equity value of 10.48%, MFC perfoms like the industry average, outperforming 48.99% of the companies in the same industry.
MFC's Return On Invested Capital of 0.75% is on the low side compared to the rest of the industry. MFC is outperformed by 63.76% of 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

MFC's Profit Margin of 13.87% is fine compared to the rest of the industry. MFC outperforms 76.51% of its industry peers.
In the last couple of years the Profit Margin of MFC has grown nicely.
With a decent Operating Margin value of 22.75%, MFC is doing good in the industry, outperforming 79.87% of the companies in the same industry.
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

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), MFC is destroying value.
MFC has less shares outstanding than it did 1 year ago.
The number of shares outstanding for MFC has been reduced compared to 5 years ago.
Compared to 1 year ago, MFC has an improved debt to assets ratio.

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.
The Debt to FCF ratio of MFC (0.44) is better than 83.22% of its industry peers.
MFC has a Debt/Equity ratio of 0.26. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of MFC (0.26) is better than 60.40% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.26
Debt/FCF	0.44
Altman-Z	N/A

ROIC/WACC0.09

WACC8.37%

2.3 Liquidity

		Industry Rank	Sector Rank
Current Ratio	N/A
Quick Ratio	N/A

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an nice 9.55% over the past year.
Measured over the past 5 years, MFC shows a small growth in Earnings Per Share. The EPS has been growing by 5.49% on average per year.
The Revenue has been growing slightly by 7.70% in the past year.
MFC shows a very negative growth in Revenue. Measured over the last years, the Revenue has been decreasing by -13.62% yearly.

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

The Earnings Per Share is expected to grow by 5.15% on average over the next years.
The Revenue is expected to grow by 11.90% on average over the next years. This is quite good.

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

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.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 12.32 indicates a correct valuation of MFC.
The rest of the industry has a similar Price/Earnings ratio as MFC.
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.
Based on the Price/Forward Earnings ratio of 11.14, the valuation of MFC can be described as reasonable.
MFC's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 25.98. MFC is valued rather cheaply when compared to this.

		Industry Rank	Sector Rank
PE	12.32
Fwd PE	11.14

4.2 Price Multiples

MFC's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. MFC is cheaper than 63.09% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of MFC indicates a rather cheap valuation: MFC is cheaper than 84.56% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	2.8
EV/EBITDA	7.39

4.3 Compensation for Growth

MFC's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.

PEG (NY)1.51

PEG (5Y)2.24

EPS Next 2Y8.45%

EPS Next 3Y8.81%

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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.
Compared to an average industry Dividend Yield of 2.41, MFC pays a bit more dividend than its industry peers.
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

On average, the dividend of MFC grows each year by 20.17%, which is quite nice.
MFC has paid a dividend for at least 10 years, which is a reliable track record.
MFC has not decreased its dividend in the last 3 years.

Dividend Growth(5Y)20.17%

Div Incr Years3

Div Non Decr Years3

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 2Y8.45%

EPS Next 3Y8.81%

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MANULIFE FINANCIAL CORP / MFC FAQ

What is the fundamental rating for MFC stock?

ChartMill assigns a fundamental rating of 4 / 10 to MFC.

Can you provide the valuation status for MANULIFE FINANCIAL CORP?

ChartMill assigns a valuation rating of 5 / 10 to MANULIFE FINANCIAL CORP (MFC). This can be considered as Fairly Valued.

How profitable is MANULIFE FINANCIAL CORP (MFC) stock?

MANULIFE FINANCIAL CORP (MFC) has a profitability rating of 4 / 10.

How financially healthy is MANULIFE FINANCIAL CORP?

The financial health rating of MANULIFE FINANCIAL CORP (MFC) is 4 / 10.

What is the earnings growth outlook for MANULIFE FINANCIAL CORP?

The Earnings per Share (EPS) of MANULIFE FINANCIAL CORP (MFC) is expected to grow by 8.17% in the next year.