# SLF vs MFC vs GWO



## gibor365 (Apr 1, 2011)

I hold all big 6 Canadian banks, but don't hold any insurance companies... Now I have some available cash, so at some point want to initiatate position.... Looking at SLF vs MFC vs GWO , looks like all fairy values... Which one in your opinion is better ?


----------



## Moneytoo (Mar 26, 2014)

We have SLF and MFC, wish I purchased Intact Financial (IFC) instead - it grew amazingly over the same period of time while the other two went sideways... Now dropped a bit, but, of course, "past performance yada-yada"


----------



## My Own Advisor (Sep 24, 2012)

I like all three  Don't own IFC. 

You could always own POW and get access to GWO and IGM.


----------



## gibor365 (Apr 1, 2011)

> We have SLF and MFC


 I thought you hold now only ETFs and AAPL 


> I like all three


 I want to buy only one of them  not enough $ for all .....
I'd like to buy one that increasing dividends every year....but looks like none of them does it.... they increase sometimes in years .... and sometimes decrease (MFC).....


----------



## Moneytoo (Mar 26, 2014)

gibor said:


> I thought you hold now only ETFs and AAPL


We have a bunch of ETFs and a bunch of stocks, AAPL is the only stock right now in US Growth Equity Category (sold Boeing, First Solar and Starbucks and purchased index ETFs instead ) Here're our CA Dividend Stocks:

BCE Inc.
Bank of Nova Scotia
Crescent Point Energy
Husky Energy
Manulife Financial
New Flyer Industries Inc.
Northland Power Inc.
Potash Corp.
Sun Life Financial Inc.
TD Bank
Telus Corp.
TransCanada Corp

(and a few more in other categories )


----------



## gibor365 (Apr 1, 2011)

> We have SLF and MFC, wish I purchased Intact Financial (IFC) instead


 actually looks like IFC is the only insurance company that increased dividends for last 10 years


----------



## Moneytoo (Mar 26, 2014)

gibor said:


> actually looks like IFC is the only insurance company that increased dividends for last 10 years


It's also our house & car insurer, so when it got recommended on BNN last fall (once!) - I started watching it... Yet bought SLF for my husband because it was recommended more often (and had higher dividend yield) and MFC for myself because it was recommended the most... Which goes to show that sometimes it's better to go with what you know than listen to those whose job is to analyze and pick stocks


----------



## supperfly17 (Apr 18, 2012)

gibor said:


> I hold all big 6 Canadian banks, but don't hold any insurance companies... Now I have some available cash, so at some point want to initiatate position.... Looking at SLF vs MFC vs GWO , looks like all fairy values... Which one in your opinion is better ?


I only own MFC, just because I started purchasing it in 2010. Has done reasonably well since then. They just recently completed their purchase of Standard Life, which should help them down the road accumulate more market share.


----------



## Synergy (Mar 18, 2013)

I couldn't decide between SLF & MFC so I bought both. One for my registered account and one for my non registered account.


----------



## leeder (Jan 28, 2012)

MFC is probably the cheapest of the three lifecos. I personally hold MFC. SLF's yield is attractive though. 

IFC deals with property & casualty insurance. Slightly different sector than GWO, MFC, and SLF.


----------



## Eclectic12 (Oct 20, 2010)

gibor said:


> actually looks like IFC is the only insurance company that increased dividends for last 10 years


Lots of concerns about the dividend history but where "last ten years" is the criteria ... all three listed companies have increases. 

According to Yahoo, SLF last increased their dividends in Nov 2007. MFC is all over the map with increases from 2005 through 2009, then a dividend cut and a 2015 increase. GWO is the best over ten years with dividend increases in 2005, 2007, 2008 & 2015.

Then too, both SLF and MFC only have recent stock track records dating back to 1999 when they converted from being mutual companies.


Cheers


----------



## Eclectic12 (Oct 20, 2010)

leeder said:


> ... IFC deals with property & casualty insurance. Slightly different sector than GWO, MFC, and SLF.


Economical Insurance looks closer but the demultualisation announced in Dec 2010 is on hold so there's no stock at the moment. :biggrin:


Cheers


----------



## Vicjai (May 15, 2015)

I don't think you can go wrong with any of them. Their business are in the long run and are quite sensitive to interest rates. If i had to choose, it would be MFC ftw. Their international expansion business model in the far east is paying off and will eventually be reflected in the stock price. At $22 a share, it won't stay low forever.


----------



## gibor365 (Apr 1, 2011)

SLF also has very gig international exposure _The Company and its partners have operations in key markets around the world, including Canada, the United States, the United Kingdom (U.K.), Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China, Australia, Singapore, Vietnam and Bermuda._


----------



## Beaver101 (Nov 14, 2011)

Insurance companies (Canadian) are not immune to expansions and economical downturn - eg. Confederation Life ... and then like any other go big Canadian company.


----------



## Toronto.gal (Jan 8, 2010)

gibor said:


> SLF also has very big international exposure _The Company and its partners have operations in key markets around the world, including Canada, the United States, the United Kingdom (U.K.), Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China, Australia, Singapore, Vietnam and Bermuda._


MFC's exposure to Asia is more than double that of SLF. 

MFC's core earnings goal for 2016 [originally made for 2015] = $4 billion, which represents an increase of over 50% from 3 years ago. The Asian business [11 units] is expected to contribute about 40% of that estimated goal.
http://www.manulife.com/public/files/201/1/FactSheetAsia.pdf

*'It all means that Canada’s life insurers are crafting a new life outside their home country – and investors with a taste for international exposure can get more than they may have expected.'*
http://www.theglobeandmail.com/glob...ks-depend-on-foreign-markets/article19577383/

All 3 stocks were screaming buys several times since 2009 [if not necessarily in 09] - some are still good buys 2day.



Beaver101 said:


> Confederation Life ... .


Who would have thought it would have seen its end after 123 years [there have been 4 such insolvencies in Canada I believe].


----------



## gibor365 (Apr 1, 2011)

> MFC's exposure to Asia is more than double that of SLF.


 yes, but MFC market cap almost twicw as big as SLF's...
I any case , I see some pluses and minuses in both companies.....and cannot decide what is better buy right now....


----------



## Moneytoo (Mar 26, 2014)

gibor said:


> and cannot decide what is better buy right now....


On globe investor, MFC is a Buy, SLF is a Hold: http://www.theglobeandmail.com/globe-investor/markets/stocks/summary/?q=SLF-T


----------



## Toronto.gal (Jan 8, 2010)

gibor said:


> but MFC market cap almost twice as big as SLF's.......


I was referring to MFC's growth/presence in said market/region.


----------



## gibor365 (Apr 1, 2011)

Moneytoo said:


> On globe investor, MFC is a Buy, SLF is a Hold: http://www.theglobeandmail.com/globe-investor/markets/stocks/summary/?q=SLF-T


Thomson Reuters give to both 10 (just 66 stocks on TSX have such rating),
SLF: EPS MRQ 9,8% and TTM +6.6%, 
MFC : -15% and -1.3% 

SLF also has a bit higher Profit margin ....


----------



## Eclectic12 (Oct 20, 2010)

Beaver101 said:


> Insurance companies (Canadian) are not immune to expansions and economical downturn - eg. Confederation Life ... and then like any other go big Canadian company.


LOL ... I hope they are not immune to expansions ... the question is how good is the business plan and how experienced is the management team to react should things change. 

In Confederation Life's case - it would appear that the CEO at the helm at the time had only a high school education, made his way up to the CEO post and was supported by another expansionist executive. It also didn't help that their new head office was being built for $90 million while real estate was tanking.


Cheers


----------



## Eder (Feb 16, 2011)

In the long run there has been no out performance between Manulife or Sun Life...flip a coin I guess.


----------



## Beaver101 (Nov 14, 2011)

Eclectic12 said:


> LOL ... I hope they are not immune to expansions ... the question is how good is the business plan and how experienced is the management team to react should things change.
> 
> In Confederation Life's case - it would appear that the CEO at the who had only a high school education made his way up to the CEO post and was supported by another expansionist executive. It also didn't help that their new head office was being built for $90 million while real estate was tanking.
> 
> ...


 ... oops (too quick of a post), I meant insurance companies' (particularly rapid earlier) expansion or foray into other business lines do not immunize them during economic downturns - a Canadian example was Confederation Life. 

Hmmm...Confed Life CEO had a high school education only? didn't know that ... and $90 millions for the head office? - and that is one ugly building, now occupied by Rogers. :biggrin:


----------



## Vicjai (May 15, 2015)

Toronto.gal said:


> MFC's exposure to Asia is more than double that of SLF.
> 
> MFC's core earnings goal for 2016 [originally made for 2015] = $4 billion, which represents an increase of over 50% from 3 years ago. The Asian business [11 units] is expected to contribute about 40% of that estimated goal.
> http://www.manulife.com/public/files/201/1/FactSheetAsia.pdf
> ...



Thumbs up! MFC FTW :victorious::victorious::victorious:


----------



## Eclectic12 (Oct 20, 2010)

Beaver101 said:


> ... oops (too quick of a post), I meant insurance companies' (particularly rapid earlier) expansion or foray into other business lines do not immunize them during economic downturns - a Canadian example was Confederation Life.


Based on other posts ... I thought that's what you meant.

This is true ... though at the same time, expansion into other markets does to a degree disconnect them from Canada's economic downturns. If it's world-wide it's a problem and if management is bad, it may not matter which market is up/down/sideways. :biggrin:


Then too, for those wanting international exposure ... buying a Canadian company can do this.




Beaver101 said:


> ... Confed Life CEO had a high school education only? didn't know that ... and $90 millions for the head office? - and that is one ugly building, now occupied by Rogers. :biggrin:


The good news was that they had assets so that I recall reading that when all was sold, the insurance company failure fund had to get from the other member insurance companies $6 million instead of the initial estimates.


Cheers


----------



## londoncalling (Sep 17, 2011)

earnings out today for MFC and Share price drops 8.5%. I don't own any insurance cos. anybody think the drop is an over reaction? TSX down 5 days straight. Got the morning off tomorrow be hard not to buy something. :livid:


----------



## pwm (Jan 19, 2012)

GWO is the better choice. See the 10 year chart of the 3 stocks:

View attachment 8442


I say that not just because I worked there for 35 years. The chart speaks for itself.


----------



## Canadian (Sep 19, 2013)

I started a position yesterday on the news. A 10% drop on earnings that met expectations that brought it to a 52-week low - figured it's worth getting my feet wet. Not a company that I mind holding long-term so I'm happy to collect the +4% dividend if it takes a little while to rebound.


----------



## Canadian (Sep 19, 2013)

pwm said:


> GWO is the better choice. See the 10 year chart of the 3 stocks:


You can cherry pick any time frame to say one stock has outperformed the other. If you go back to 2000 you'll see MFC has increased 244%, outpacing GWO's 177%.


----------



## My Own Advisor (Sep 24, 2012)

pwm said:


> GWO is the better choice. See the 10 year chart of the 3 stocks:
> 
> View attachment 8442
> 
> ...


Great stock. Do you own the parent(s) as well pwm? POW or PWF?

Long SLF, MFC and GWO.


----------



## pwm (Jan 19, 2012)

Canadian said:


> You can cherry pick any time frame to say one stock has outperformed the other. If you go back to 2000 you'll see MFC has increased 244%, outpacing GWO's 177%.


GWO didn't cut it's dividend.


----------



## Canadian (Sep 19, 2013)

pwm said:


> GWO didn't cut it's dividend.


That's fine. I'm not suggesting that GWO is a worse investment, just that relative performance will vary depending on what time frame you select. As a buyer, however, I have to say that at this very moment the stock that is 40% off its 52-week high and just yesterday had a 10% drop in its price intrigues me more than the one that is 20% off its 52-week high. I'm sure both stocks will fare well over the long-term. I would be arguing the same case for GWO if the situation were reversed.


----------



## lost in space (Aug 31, 2015)

If you look at the earnings history of each company, Sunlife lost money in 2008 and again in 2011, Manulife earnings dropped about 80% in 2008 came back in 2009 and dipped another 30% in 2010, while Great West Life earnings dipped 4% in 2008 and have grown slowly over the past 4 years. Going forward we see Manulife is forecast to have very strong earnings 20% 2016, 10% 2017 Sunlife is 2% and then 10% while Sulife is 5% and 8%. All thanks to Mr Bear are greatly undervalued at the moment. If all were to return to this historical P/E ratios we’d see the following gains to the end of 2017 

$17 price gain or 120% for Manulife plus $1.53 in dividends or 
$25 price gain or 70% for Sunlife along with $3.24 in dividends
$15 price gain or 50% for Great West Life along with $2.68 in dividends

Personally I’d be a bit concerned as to why Sunlife dipped to a loss twice in the past 5 years.


----------



## Synergy (Mar 18, 2013)

Canadian said:


> You can cherry pick any time frame to say one stock has outperformed the other. If you go back to 2000 you'll see MFC has increased 244%, outpacing GWO's 177%.


My sentiments exactly!


----------



## Beaver101 (Nov 14, 2011)

pwm said:


> GWO is the better choice. See the 10 year chart of the 3 stocks:
> 
> View attachment 8442
> 
> ...


 ... ? ... why this detail to be a determining factor to buy?

From an investor's perspective of better value, I would rather go with SLF or MFC - global exposure and not home-based business concentration (and bias).


----------



## pwm (Jan 19, 2012)

GWO dividend just increased by 6.1%


----------



## Canadian (Sep 19, 2013)

MFC increased theirs yesterday by 9%. Once interest rates eventually begin to rise, dividends won't be as relevant though as any significant returns should be coming through capital appreciation.


----------



## Islenska (May 4, 2011)

pwm,good for you, must have been a fine place to work being there 35 years!

Always thought the Great West Life building was a skyscraper (in my early days), until I went to New York


----------



## My Own Advisor (Sep 24, 2012)

pwm said:


> GWO dividend just increased by 6.1%


Nice


----------



## londoncalling (Sep 17, 2011)

Canadian said:


> MFC increased theirs yesterday by 9%. Once interest rates eventually begin to rise, dividends won't be as relevant though as any significant returns should be coming through capital appreciation.


I have heard about rising interest rates for over 7 years but have yet to see an increase that has meant anything. At some point this will have an effect. that being said who buys an insurance company as a cap gains play? My understanding lifecos are held for other reasons (portfolio correlation, low beta etc) Trading aside cap gains should be a small factor in the decision to own a lifeco. What I would see as important would be balance sheet, diversification, growing stable dividend and low debt.

Cheers


----------



## Canadian (Sep 19, 2013)

Similar to selecting an insurance company with the financial health to withstand low or decreasing interest rates, I think as we are due for the eventual rate rise that it would be wise to select a company that would benefit most. I wouldn't necessarily call it a cap gains play, but rather seeking to maximise total return over the long run. Of course one could argue a case for any of the three companies and it would hold some weight.


----------



## londoncalling (Sep 17, 2011)

Thanks Canadian. Your statement above makes a lot of sense. I know very little about how insurance co stocks behave as I had little interest in them due to low interest rates we've experienced during my time as an investor. I wasn't a DYI investor in 08 and 09 and felt I missed the bargains on these 3 at that time. In my short analysis, any of these 3 should return close to similar results over the long term. However, when purchasing individual equities one must make an apples to apples comparison(as shown by the previous posts) to help guide their decision. For me it may be a case of good enough is good enough. I still need to do more digging into these companies to see if I will buy. Although I follow a dividend growth strategy the reality is that at the end of the day total return is what's important. Thanks to all who have contributed to this thread in recent days.

Cheers


----------



## lost in space (Aug 31, 2015)

All three stocks are greatly undervalued

*Manulife*

MFC just increased the dividend and the payout ratio is quite healthy at around 40%. Forwards earnings growth is 6% (1% in 2016 and 10% in 2017) I did notice that earnings peaked at 2.84 a share in 2007 and then crashed to 32 cents a share. They then recovered and are growing again. Edit: forgot to add that the price crashed along with the earnings.

Normal PE ratio 15
Current PE ratio 9.5
Price projects if returns to its normal PE ration
2016 $30 or 80% price gain
2017 $16 or 100% price gain
2018 $20 or 120% price gain

*Sunlife*

SLF really got hammered in 2008 not only did they post a small loss in 2008 but again in 2011 earnings dropped some 90% they did managed to eek out a small profit but the market wasn’t impressed. Between 2008 and 2011 the price basically went sideways. Since then earnings have recovered strongly. 2016 will see a 1% increase and 2017 11%. The stock is currently undervalued. Has not increased the dividend since 2008 but if earnings continue to grow I expect that to change..

Normal PE ratio 15
Current PE ratio 10.5
Price projects if returns to its normal PE ration
2016 $18 or 50% price gain
2017 $23 or 60% price gain

*Great West Life*

This is the least undervalued of all three. It is also the only stock of the three that came through 2008 relatively unscathed. Earnings did drop 4% 2007 and 25% 2009, since then they have recovered are growing at nearly 10% a year very strong growth. Again the dividend went sideways after 2008 but the company increased it this year. Rather unusual they also list the payout ratio alongside the dividend on the website. 

Normal PE ratio 15
Current PE ratio 12
Price projects if returns to its normal PE ration
2016 $10 or 30% price gain
2017 $14 or 45% price gain


----------



## lost in space (Aug 31, 2015)

A few more thoughts. Manulife (ignoring 2008) has tended to stick to it's PE ratio of 15. Of course when earnings drop than the price goes with it

I noticed that SLF tended to bounce between 12 and 15 PE ratio since 2008 it's tended to traded a lower PE ratio. What has brought the price higher has been strong earnings. The question is will the stock return to it's historical ratio of 15 or not. It is undervalued but the question is how much!

GWO on the other hand, even through 2008 has had pretty consistent earnings and has tended to stick to it's 15 PE ratio, dropping below and then coming back but the range is not as great as the above 2 stocks. 

Back in 2012 I made a nice gain on SLF and sold beginning of 2014. My "gut feel" is that Manulife is the one with the most upside. It also helped that they felt confident enough to increase the dividend Manulife Increases the Dividend

Noticed also that Sunlife increased the dividend while Great West Life didn't

As an aside it looks like we've hit bottom, my own personal feeling is the TSX will start turning around, and of course if I'm wrong than I'm still getting my dividends


----------



## OptsyEagle (Nov 29, 2009)

You guys are really beating to death something that you really have no way of knowing...what insurance company investment will turn out to be the best. Even the CEOs of these companies would only have a foggy idea.

If I were you I would save yourself some time and go for what I would call "the closest thing to a sure thing there is when investing in the insurance industry". It is a very simple strategy ---> BUY THEM ALL or in this case, all three.

With todays trading commission rates you can divide your investment by 3 and put equal amounts into MFC, SLF and GWO. Most likely all 3 will muddle along nicely and you will end up with a very satisfactory return. In another scenario one of them will walk directly into a sharp object and perhaps fall off a cliff ... and you will end up with an even better return once the dust settles. That is because it is unlikely that Canada could survive without a vibrant insurance industry. So if the entire industry suffers you will find that they will all react together with increased pricing, etc., to ensure their prosperity. Now if only one falls on hard times, due to some form of mismanagement, the other ones will benefit from taking over their part of the business.  Remember 2 insurance companies can provide all the insurance products MUCH MORE PROFITABLY then 3 insurance companies. Your portfolio doesn't prosper from the number of holdings it has, it prospers from the profitability of the holdings it has. 

Buy them all and forget about them. That is my suggestion.


----------



## Eclectic12 (Oct 20, 2010)

OptsyEagle said:


> You guys are really beating to death something that you really have no way of knowing...what insurance company investment will turn out to be the best. Even the CEOs of these companies would only have a foggy idea.
> 
> If I were you I would save yourself some time and go for what I would call "the closest thing to a sure thing there is when investing in the insurance industry". It is a very simple strategy ---> BUY THEM ALL or in this case, all three.


This part I understand.




OptsyEagle said:


> In another scenario one of them will walk directly into a sharp object and perhaps fall off a cliff ... and you will end up with an even better return once the dust settles. That is because it is unlikely that Canada could survive without a vibrant insurance industry ...


This seems naive.

It is going to juice up one's return to have say, MFC tank then bought out at $0.75 on the dollar by say, Equitable Life of Canada or Desjardins?
The only way I see that it would work the way you describe is if one of the other two get to buy some/all of the third.

Otherwise, the short end of the stick have no counter-balancing up side for the investor.

Cheers


----------



## OptsyEagle (Nov 29, 2009)

You are not giving it enough time...and yes, the assumption is that the other 2 take over a large percentage of the failed companies businesses. That part may or may not happen. Anyway I did say "as close" to a sure thing there is.


----------

