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Reasons Why Investors Should Retain Sun Life (SLF) Stock Now
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Sun Life Financial Inc. (SLF - Free Report) is well-poised for growth, driven by higher individual participating life insurance sales, new business gains, favorable estimates and strong financial position.
Earnings Surprise History
Sun Life has a decent track record of beating the Zacks Consensus Estimate for earnings in the last trailing four quarters, the average being 9.63%.
Zacks Rank & Price Performance
SLF currently caries a Zacks Rank #3 (Hold). Year to date, the stock has gained 9.8%, outperforming the industry’s growth of 7.2%.
Image Source: Zacks Investment Research
Northbound Estimate Revision
The Zacks Consensus Estimate for Sun Life’s 2023 and 2024 earnings has moved up 0.2% and 0.3%, respectively, in the past 60 days, reflecting analysts’ optimism.
Optimistic Growth Projections
The Zacks Consensus Estimate for the company’s 2024 earnings is pegged at $5.07 per share, suggesting growth of 7.8% year over year. The expected long-term earnings growth rate is pegged at 8%.
Business Tailwinds
Sun Life remains well-poised for growth, riding on premier asset management franchises at MFS and SLC Management as well as leading wealth and insurance market positions in Canada. Also, the shift toward more capital-light businesses in the United States as well as an established presence in attractive markets in Asia should benefit the insurer in the long run.
Asia sales are expected to gain from growth in mutual fund sales in India, money market sales in the Philippines and the Hong Kong pension business.
The Canada business is likely to improve from business growth, higher new business gains and experience-related items. Higher individual participating life insurance sales and improved large case group benefits sales in Sun Life Health should benefit Insurance sales.
The life insurer recently collaborated with Independence Blue Cross to become the exclusive provider of stop loss insurance for its customers. This move bodes well for Sun Life as diversifying its revenue base will help it navigate ongoing inflationary headwinds. This collaboration is expected to aid the health and benefits of the U.S. segment. Improving margins in the stop loss business arising from dropping loss ratios should continue to aid bottom-line results in the future.
Sun Life Investment Management fosters its investment capabilities in private fixed income, mortgages and real estate by investing in pension plans and other institutional investors. This development further strengthens the company’s Asset Management pillar, which provides a higher return on equity (ROE), lower capital and volatility and has the potential for an earnings upside.
The company’s capital position remains strong, with Sun Life Assurance’s Minimum Continuing Capital and Surplus Requirements ratio of 148% at first-quarter end. Its capital and cash positions remain healthy and along with a low leverage ratio provide flexibility and opportunity for further capital deployment. Sun Life targets minimum cash and other liquid assets at the holding company of $500 million.
SLF targets dividend payout ratio in the range of 40-50%. The life insurer also repurchases shares, reflecting its strong cash and capital generation in its businesses. The company remains focused on improving ROE and retention of flexibility for future growth opportunities.
Reinsurance Group has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 56.92%. Year to date, RGA’s shares have gained 0.5%.
The Zacks Consensus Estimate for 2023 and 2024 has moved 0.1% and 0.6% north, respectively, in the past 60 days, reflecting analysts’ optimism on the stock.
Manulife Financial has a decent track record of beating earnings surprise in three of the last four quarters, while missing once, the average beat being 1.55%. Year to date, MFC’s shares have gained 3.9%.
The Zacks Consensus Estimate for 2023 and 2024 earnings per share is pegged at $2.44 and $2.62, indicating an increase of 2.5% and 7.4% year over year, respectively.
Primerica’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters, while missing in one, the average being 3.81%.
The Zacks Consensus Estimate for PRI’s 2023 and 2024 earnings per share indicates a year-over-year increase of 34% and 11.4%, respectively. Year to date, PRI’s shares have rallied 40.4%.
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Reasons Why Investors Should Retain Sun Life (SLF) Stock Now
Sun Life Financial Inc. (SLF - Free Report) is well-poised for growth, driven by higher individual participating life insurance sales, new business gains, favorable estimates and strong financial position.
Earnings Surprise History
Sun Life has a decent track record of beating the Zacks Consensus Estimate for earnings in the last trailing four quarters, the average being 9.63%.
Zacks Rank & Price Performance
SLF currently caries a Zacks Rank #3 (Hold). Year to date, the stock has gained 9.8%, outperforming the industry’s growth of 7.2%.
Image Source: Zacks Investment Research
Northbound Estimate Revision
The Zacks Consensus Estimate for Sun Life’s 2023 and 2024 earnings has moved up 0.2% and 0.3%, respectively, in the past 60 days, reflecting analysts’ optimism.
Optimistic Growth Projections
The Zacks Consensus Estimate for the company’s 2024 earnings is pegged at $5.07 per share, suggesting growth of 7.8% year over year. The expected long-term earnings growth rate is pegged at 8%.
Business Tailwinds
Sun Life remains well-poised for growth, riding on premier asset management franchises at MFS and SLC Management as well as leading wealth and insurance market positions in Canada. Also, the shift toward more capital-light businesses in the United States as well as an established presence in attractive markets in Asia should benefit the insurer in the long run.
Asia sales are expected to gain from growth in mutual fund sales in India, money market sales in the Philippines and the Hong Kong pension business.
The Canada business is likely to improve from business growth, higher new business gains and experience-related items. Higher individual participating life insurance sales and improved large case group benefits sales in Sun Life Health should benefit Insurance sales.
The life insurer recently collaborated with Independence Blue Cross to become the exclusive provider of stop loss insurance for its customers. This move bodes well for Sun Life as diversifying its revenue base will help it navigate ongoing inflationary headwinds. This collaboration is expected to aid the health and benefits of the U.S. segment. Improving margins in the stop loss business arising from dropping loss ratios should continue to aid bottom-line results in the future.
Sun Life Investment Management fosters its investment capabilities in private fixed income, mortgages and real estate by investing in pension plans and other institutional investors. This development further strengthens the company’s Asset Management pillar, which provides a higher return on equity (ROE), lower capital and volatility and has the potential for an earnings upside.
The company’s capital position remains strong, with Sun Life Assurance’s Minimum Continuing Capital and Surplus Requirements ratio of 148% at first-quarter end. Its capital and cash positions remain healthy and along with a low leverage ratio provide flexibility and opportunity for further capital deployment. Sun Life targets minimum cash and other liquid assets at the holding company of $500 million.
SLF targets dividend payout ratio in the range of 40-50%. The life insurer also repurchases shares, reflecting its strong cash and capital generation in its businesses. The company remains focused on improving ROE and retention of flexibility for future growth opportunities.
Stocks to Consider
Some better-ranked stocks from the life insurance industry are Reinsurance Group of America, Incorporated (RGA - Free Report) , Manulife Financial Corp (MFC - Free Report) and Primerica, Inc. (PRI - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Reinsurance Group has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 56.92%. Year to date, RGA’s shares have gained 0.5%.
The Zacks Consensus Estimate for 2023 and 2024 has moved 0.1% and 0.6% north, respectively, in the past 60 days, reflecting analysts’ optimism on the stock.
Manulife Financial has a decent track record of beating earnings surprise in three of the last four quarters, while missing once, the average beat being 1.55%. Year to date, MFC’s shares have gained 3.9%.
The Zacks Consensus Estimate for 2023 and 2024 earnings per share is pegged at $2.44 and $2.62, indicating an increase of 2.5% and 7.4% year over year, respectively.
Primerica’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters, while missing in one, the average being 3.81%.
The Zacks Consensus Estimate for PRI’s 2023 and 2024 earnings per share indicates a year-over-year increase of 34% and 11.4%, respectively. Year to date, PRI’s shares have rallied 40.4%.