Manulife Financial Corp. (TSX:MFC)(NYSE:MFC) is one of the world’s largest financial services companies with about $1.01 trillion in assets under management and administration as of March 31. Its stock has posted a disappointing performance so far in 2017, rising less than 1%, but I think it represents an attractive investment opportunity for the long-term for two primary reasons. Let’s take a closer look at these reasons to see if you agree and if you should add it to your portfolio today.
First, its stock is undervalued. It currently trades at just 10.8 times fiscal 2017’s estimated earnings per share of $2.23 and a mere 9.9 times fiscal 2018’s estimated earnings per share of $2.44, both of which are very inexpensive compared with its trailing-12-months price-to-earnings multiple of 15.4 and its five-year average price-to-earnings multiple of 17.7.
Second, it’s both a high-yield and dividend-growth play. Manulife pays a quarterly dividend of $0.205 per share, representing $0.82 per share annually, which gives it a 3.4% yield at today’s levels. It has also raised its annual dividend payment for three consecutive years, and its 10.8% increase in February has it positioned for 2017 to mark the fourth consecutive year with an increase.
I think Manulife is well positioned to outperform the market going forward, so if you agree, consider buying shares today.