Sun Life Financial Inc. (TO:SLF) has made a name for itself in the life insurance industry in the United States and across the world. The life insurer has successfully managed to meet the ever-changing demands and expectations of its clients and has built a solid product and service portfolio over the years.
Sun Life Financial has been making significant efforts to diversify its international business. To that end, the company remains focused on the emerging economies of Asia, which is expected to generate higher returns and growth in comparison to the North American markets.
The company has been witnessing improved earnings at its Asia segment and expects the momentum to continue in the near term, owing to its strong foothold in China, Philippines, India, Hong Kong and Indonesia. The company also intends to make strategic investments in the region to retain such momentum.
This Zacks Rank #2 (Buy) stock has been making effective changes in its business mix to drive profitability. To that end, the company deploys capital in businesses with potential to generate a higher return on equity. Plus, the company engages in shareholder-friendly moves, boosting investor confidence in the stock.
Additionally, Sun Life Financial has been undertaking prudent acquisitions over the past few years, which in turn have not only helped expanding its geographical footprint but also accelerated the company’s overall growth.
Sun Life Financial also remains committed toward its Global Asset Management Business growth, which has been witnessing an increase in asset base over a considerable period of time. The life insurer targets Sun Life Investment Management asset under management of approximately $100 billion over the next five years.
Notably, the company has projected a medium-term EPS growth between 8-10%, on the back of its sustained operational performance. Plus, the life insurer anticipates a return on equity to range of 12-14%, while the dividend payout ratio is likely to be 40–50% of the underlying net income.
Shares of Sun Life Financial have gained 11.88% in the last one year, underperforming the Zacks categorized Life Insurance industry’s massive 43.01% increase. However we believe, the company’s solid top-line growth, improved premiums and a strong performance at its Canada and Asia businesses will help the stock to turn around in the near term.
Interestingly, valuation is attractive at present as the stock is currently trading at a price to book multiple of 1.43 in the last one year, a whopping 37.6% discount to the industry average of 2.29.
Other Stocks to Consider
Investor interested in some other stocks from the insurance industry can consider Reinsurance Group of America, Incorporated (NYSE:RGA) , Cigna Corporation (NYSE:CI) and FBL Financial Group, Inc. (NYSE:FFG) .
Cigna provides insurance plus related products and services in the United States and internationally. The company has delivered positive surprises in three of the last four quarters with an average beat of 1.35%. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Reinsurance Group deals in reinsurance business. The company has delivered positive surprises in three of the last four quarters with an average beat of 5.08%. The company holds a Zacks Rank #2.
FBL Financial sells individual life insurance and annuity products. The company has delivered positive surprises in two of the last four quarters with an average beat of 1.98%. The company holds a Zacks Rank #2.
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Reinsurance Group of America, Incorporated (RGA): Free Stock Analysis Report
Sun Life Financial Inc. (SLF): Free Stock Analysis Report
Cigna Corporation (CI): Free Stock Analysis Report
FBL Financial Group, Inc. (FFG): Free Stock Analysis Report
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