Sun Life Financial Inc. (TSX:SLF) is well-poised for growth, benefitting from strong segmental performance, initiatives undertaken and solid growth in its Global Asset Management business.
The company has a Value Score of A, which reflects an attractive valuation of the stock.
Estimates for Sun Life have been raised over the past 30 days, reflecting analysts’ confidence in the stock. The Zacks Consensus Estimate for 2020 earnings per share has moved up 0.7% in the said time frame. Further, the company has a decent history of beating estimates in two of the trailing four quarters, the average beat being 2.3%.
Shares of the Zacks Rank #2 (Buy) life insurer have gained 13.4% in a year against the industry’s decline of 10.1%.
Sun Life’s return on equity was 13.6% in the trailing 12 months, higher than the industry average of 13%. Return on equity is a profitability measure that identifies a company’s efficiency in utilizing its shareholders’ funds.
It continues to benefit from the consistent performance across its segments — SLF Canada, SLF U.S., SLF Asset Management and SLF Asia. The momentum continued into 2019 on several business growth initiatives. Total underlying net income for the year was $2.3 billion (C$3.1 billion), up 3.7% year over year.
Sun Life seems to be in a bid of speeding up its growth prospects by undergoing several initiatives. Recently, the company launched five Sun Life Private Investment Pools, which are aimed at leveraging its capabilities and assist investors in meeting challenges of the investment marketplace.
Moreover, the company also seems to strengthen its foothold in the global real estate investment industry on buyouts. To this effect, Sun Life announced plans to acquire InfraRed Capital Partners, a real estate investment manager, in December 2019. It also completed the buyout of a majority stake in BentallGreenOak last year, thereby enhancing its real-estate capabilities.
Furthermore, Sun Life is steadily ramping up its Global Asset Management business, resulting in a growing asset base for the past several quarters. As of Dec 31, 2019, Global assets under management were $832.8 billion (C$1099.3 billion), up 15.7% year over year. Hence, we expect a strong performance from the business going forward, riding on its growing asset base.
Despite high costs incurred, we expect strong fundamentals to drive the company’s shares going forward.
Other Stocks to Consider
Some other top-ranked stocks in the same space are Brighthouse Financial, Inc. (NASDAQ:BHF) , FGL Holdings (NYSE:FG) and Primerica, Inc. (NYSE:PRI) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
All three stocks beat the Zacks Consensus Estimate in the last reported quarter by 5.13%, 33.33% and 4.72%, respectively.
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Sun Life Financial Inc. (SLF): Free Stock Analysis Report
Primerica, Inc. (PRI): Free Stock Analysis Report
Brighthouse Financial, Inc. (BHF): Free Stock Analysis Report
FGL Holdings (FG): Free Stock Analysis Report
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