Manulife Financial Corp (NYSE: MFC)

Sector: Financial Services Industry: Insurance - Life CIK: 0001086888
Market Cap 63.37 Bn
P/B 1.73
P/E 16.53
P/S 2.20
ROIC (Qtr) 15.24
Div Yield % 1.67
Rev 1y % (Qtr) 3.12
Total Debt (Qtr) 10.71 Bn
Debt/Equity (Qtr) 0.29
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About

Investment thesis

Bull case

  • Strong operating cash flow of 23.43B provides robust 2.19x coverage of total debt 10.71B, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 739.50B provides 69.04x coverage of total debt 10.71B, indicating robust asset backing and low credit risk.
  • Operating cash flow of 23.43B provides exceptional 65.79x coverage of minority interest expenses 356.20M, showing strong core operations.
  • Operating cash flow of 23.43B provides exceptional 20.98x coverage of interest expenses 1.12B, showing strong debt service capability.
  • Strong operating cash flow of 23.43B provides 4.99x coverage of SG&A expenses 4.70B, showing efficient operational cost management.

Bear case

  • Operating cash flow of 23.43B barely covers its investment activities of (20.70B), with a coverage ratio of -1.13, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 23.43B provides thin coverage of dividend payments of (2.41B) with a -9.71 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 19.49B provide limited coverage of acquisition spending of (932.12M), which is -20.91x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 23.43B is outpaced by equity issuance of (1.72B) (-13.62 ratio), indicating concerning reliance on equity markets for funding operations.
  • Retained earnings of 3.67B provide limited buffer against comprehensive income items of 13.21B, which is 0.28x, indicating elevated exposure to market risks.

Segments [axis] Breakdown of Revenue (2024)

Peer comparison

Companies in the Insurance - Life
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MET Metlife Inc 81.60 Bn 15.56 1.20 20.23 Bn
2 AFL Aflac Inc 78.90 Bn 18.62 3.49 8.69 Bn
3 MFC Manulife Financial Corp 63.37 Bn 16.53 2.20 10.71 Bn
4 PUK Prudential Plc 38.02 Bn 21.76 0.58 -
5 PRU Prudential Financial Inc 36.75 Bn 10.28 0.60 32.56 Bn
6 PRI Primerica, Inc. 19.72 Bn 133.62 17.82 0.65 Bn
7 UNM Unum Group 18.81 Bn 64.52 1.80 3.77 Bn
8 GL Globe Life Inc. 14.78 Bn 13.56 2.87 2.71 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.05 0.25
EV to Cash from Ops. EV/CFO 1.72 38.74
EV to Debt EV to Debt 3.77 4.98
EV to EBIT EV/EBIT 6.80 18.23
EV to EBITDA EV/EBITDA 5.82 14.59
EV to Free Cash Flow [EV/FCF] EV/FCF 1.72 34.05
EV to Market Cap EV to Market Cap 0.64 1.00
EV to Revenue EV/Rev 1.40 2.53
Price to Book Value [P/B] P/B 1.73 2.19
Price to Earnings [P/E] P/E 16.53 26.16
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.06 3.59
Dividend Payout Ratio % Div Payout % (Qtr) 27.70 22.49
Dividend per Basic Share Div per Share (Qtr) 0.62 1.48
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 3.26 0.41
Interest Coverage Int. cover (Qtr) 5.32 7.54
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex Growth (1y) % 0.00 -27.98
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 8.83 19.69
Dividend Growth (1y) % Div 1y % (Qtr) -61.13 15.89
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 6.75 89.68
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 3.59 64.87
EBIT Growth (1y) % EBIT 1y % (Qtr) 3.31 82.78
EBT Growth (1y) % EBT 1y % (Qtr) 5.25 344.70
EPS Growth (1y) % EPS 1y % (Qtr) 13.59 2,261.01
FCF Growth (1y) % FCF 1y % (Qtr) 27.37 186.52
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 4.79 50.91
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.03 0.13
Cash Payout Ratio Cash Payout (Qtr) 0.10 0.12
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.00
Debt to Equity Ratio Debt/Equity (Qtr) 0.29 0.49
Interest Cover Ratio Int Coverage (Qtr) 5.32 7.54
Times Interest Earned Times Interest Earned (Qtr) 5.32 7.54
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 22.90 15.04
EBIT Margin % EBIT Margin % (Qtr) 28.27 14.45
EBT Margin % EBT Margin % (Qtr) 16.76 12.36
Gross Margin % Gross Margin % (Qtr) 38.20 45.61
Net Profit Margin % Net Margin % (Qtr) 13.30 10.89