Q: To all at 5i: I have heard that MFC is powering ahead and SLF is struggling. Your thoughts will be appreciated. Thank you
5i Research Answer:
MFC stock is showing much better momentum than SLF this year and over the past year, with a wide outperformace. But this is a recent shift. For the prior decade, SLF was typically ahead. More recently, MFC's earnings have been better than SLF, with the latter suffering from elevated mortality, lower dental trends and higher asset management expenses. Meanwhile, MFC has reported record results on higher insurance sales and wealth inflows. Both stocks are cheap, with SLF at 10.5X earnings and MFC at 9.8X. Both offer attractive, growing dividends. We think both are solid long term investments today. We also like IFC: it is more expensive but potentially can grow faster than the other two.