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2 Undervalued TSX Insurance Stocks

Canadian insurance companies are expected to take a major hit due to the impact of the COVID-19 pandemic. However, I’m still bullish on Canada’s top insurance and financial services stocks in the long term. Today, I want to look at two of my top options to pick up right now.

Manulife Financial (TSX:MFC)(NYSE:MFC) stock was down 3.14% in late afternoon trading on July 31. Its shares have dropped 27% in 2020 so far.

In Q1 2020, Manulife saw net income fall $0.9 billion year-over-year to $1.3 billion. At the same time, core earnings declined 34% to $1.0 billion. Still, new business value in Canada grew to $77 million compared to $62 million in the prior year. This was driven by higher sales across all business lines.

Shares of Manulife last had a price-to-earnings ratio of 7.7 and a price-to-book value of 0.7. This puts Manulife in very favourable value territory. Better yet, it still offers a quarterly dividend of $0.28 per share. This represents a tasty 6% yield.

Sun Life Financial (TSX:SLF)(NYSE:SLF) is another insurance stock to target. Its stock has had dropped 7.9% in 2020 so far, but it has climbed 13% over the last three months. In Q1 2020, Sun Life saw underlying net income increase to $770 million over $717 million in the previous year.

Shares of Sun Life last had a favourable P/E ratio of 12 and a P/B value of 1.4. It also offers a quarterly dividend of $0.55 per share, representing a solid 4.1% yield.