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MarketScreener Homepage  >  Equities  >  Toronto Stock Exchange  >  Manulife Financial Corporation    MFC   CA56501R1064

MANULIFE FINANCIAL CORPORATION

(MFC)
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Manulife Financial surprises with dividend hike as profit triples

08/07/2014 | 09:27am EST

TORONTO (Reuters) - Manulife Financial Corp (>> Manulife Financial Corp.) unexpectedly hiked its dividend for the first time since the financial crisis on Thursday, as it reported quarterly profits that jumped on stronger financial markets but was just shy of analysts' expectations.

TORONTO (Reuters) - Manulife Financial Corp (>> Manulife Financial Corp.) unexpectedly hiked its dividend for the first time since the financial crisis on Thursday, as it reported quarterly profits that jumped on stronger financial markets but was just shy of analysts' expectations.

Investors have awaited an improved dividend since Canada's largest insurer halved the payout in 2009 as it struggled to preserve capital amid plunging markets and unprofitable products.

The company had hinted that a dividend hike was possible in 2015 at the earliest.

"We believe that this is a distinct positive and may come somewhat of a surprise to the market," Barclays Capital analyst John Aiken said in the note.

In an interview, Manulife Chief Financial Officer Steve Roder said the company decided to hike the dividend early due largely to a faster-than-expected decline in the company's leverage ratio, and growing comfort with the regulatory environment, including capital rules for insurers.

Net income attributed to shareholders was C$943 million, or 49 Canadian cents a share, compared with C$259 million, or 12 Canadian cents a share, a year earlier.

The result benefited from C$267 million in investment-related gains, due to strong returns on alternative long-duration assets and the redeployment of government securities into higher-yielding assets, and also from higher fee income on increased assets under management, the company said.

Excluding one-time items and the bulk of the market-related gains, Manulife earned 36 Canadian cents per share, just shy of analysts' estimates of 40 Canadian cents, according to Thomson Reuters I/B/E/S.

Besides its Canadian operations, Manulife owns U.S. insurer John Hancock and is growing in Asia, where it has a presence in about a dozen countries.

The dividend move follows efforts in recent years to reduce Manulife's exposure to financial markets through hedging and the exit of unprofitable business lines.

The company also has a goal of reaching C$4 billion in core profit, which excludes market-related impacts, by 2016. Core profit was C$1.4 billion in the first half of 2014.

"As we move closer to the C$4 billion (target), we would hope to have incremental step-ups in the dividend," Roder said.

Total insurance sales fell 38 percent on the year, due to a strong performance a year earlier in single premium group benefits sales. Excluding group benefits, insurance sales rose 10 percent, the company said.

Wealth management sales were down 7 percent on the year, in part due to the non-recurrence of a closed end fund offering in Canada, though funds under management rose 12 percent.

The company's shares, which are up about 5 percent year-to-date, closed at C$21.97 on Wednesday.

The result follows a stronger-than-expected profit at rival Sun Life Financial (>> Sun Life Financial Inc.) late on Wednesday.

(Editing by Lisa Von Ahn and Bernadette Baum)

By Cameron French

Stocks treated in this article : Manulife Financial Corp., Sun Life Financial Inc.

© Reuters 2014
Stocks mentioned in the article
ChangeLast1st jan.
FIRST FINANCIAL CORPORATION 0.05% 41.8 Delayed Quote.7.59%
HOPE, INC. -10.84% 2764 End-of-day quote.-38.51%
MANULIFE FINANCIAL CORPORATION 1.20% 24.47 Delayed Quote.6.76%
PREMIUM GROUP CO., LTD. 0.74% 2447 End-of-day quote.5.20%
SUN LIFE FINANCIAL INC. 2.17% 60.8 Delayed Quote.7.42%
UNITED PARCEL SERVICE, INC. -2.80% 158.9 Delayed Quote.-5.64%
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Financials
Sales 2020 73 485 M 57 742 M 57 742 M
Net income 2020 5 179 M 4 070 M 4 070 M
Net cash 2020 27 509 M 21 616 M 21 616 M
P/E ratio 2020 9,17x
Yield 2020 4,29%
Capitalization 47 478 M 37 205 M 37 307 M
EV / Sales 2020 0,27x
EV / Sales 2021 0,28x
Nbr of Employees 35 000
Free-Float 100,0%
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Technical analysis trends MANULIFE FINANCIAL CORPORATION
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TrendsBullishBullishBullish
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Mean consensus OUTPERFORM
Number of Analysts 15
Average target price 26,00 CAD
Last Close Price 24,47 CAD
Spread / Highest target 30,8%
Spread / Average Target 6,25%
Spread / Lowest Target -6,01%
EPS Revisions
Managers and Directors
NameTitle
Roy Gori President, Chief Executive Officer & Director
John M. Cassaday Chairman
Rahul M. Joshi Chief Operations Officer
Philip Witherington Chief Financial Officer
Shamus Edward Weiland Chief Information Officer
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