The insurance and financial services sector are geared up for big growth in developing markets. This has been especially true in Asia, which has seen huge growth in its middle class in recent decades. Middle-class growth has attracted the attention of top Canadian insurance companies. Today, I want to discuss why these companies are undervalued dividend stocks worth buying.
Manulife Financial (TSX:MFC)(NYSE:MFC) is a Toronto-based company that provides financial products and services around the world. Its shares have climbed 21% in 2021 as of close on March 30. The stock is up over 50% year over year. Manulife unveiled its last batch of 2020 results on February 10.
The company saw core earnings fall $0.5 billion from the prior year to $5.5 billion in 2020. Overall, its performance was solid in the face of the devastating COVID-19 pandemic. Moreover, it achieved Global Wealth Asset Management (WAM) inflows of $8.9 billion for the full year. Global markets have proven resilient as central banks have offered significant support.
Shares of Manulife last had a favourable price-to-earnings ratio of 9.3. Manulife last paid out a quarterly dividend of $0.28 per share, which represents a 4.1% yield.
Sun Life (TSX:SLF)(NYSE:SLF) is another top Toronto-based financial services provider and insurer. Its stock is up 13% in 2021 and 41% from the prior year.
Underlying net income rose to $3.21 billion in 2020 – up from $3.05 billion in 2019. Sun Life stock possesses a favourable P/E ratio of 15. It last paid out a quarterly dividend of $0.55 per share. That represents a 3.4% yield.
