The S&P/TSX Composite Index closed at a record high on February 19. There was also positive momentum in markets south of the border. Still, there is concern that an economic slowdown in Europe and potentially China could have ramifications for markets across the globe.
The two stocks I will look at today offer solid value, but this is something that investors may want to keep in mind. Both equities are reliant on Asia-based growth going forward.
Manulife Financial (TSX:MFC)(NYSE:MFC) is a Toronto-based insurance and financial services provider. Its shares have climbed 25% year-over-year as of close on February 19, but the stock has been stagnant to start 2020.
Core earnings rose 5% to $6 billion in 2019 as Asia new business value grew to $1.59 billion compared to $1.44 billion in 2018.
The stock is trading on the high-end of its 52-week range but boasts solid value. It last possessed a favourable price-to-earnings ratio of 9.5 and a price-to-book value of 1.1.
Sun Life (TSX:SLF)(NYSE:SLF) is another top Canadian insurer which owes much of its recent growth to its expansion into Asia. Its stock is up 37% year-over-year and has started hot in 2020 – rising 10% so far.
In 2019 underlying earnings per share rose to $5.16 over $4.86 in 2018. Shares of Sun Life still possess a favourable P/E ratio of 14 and a P/B value of 1.8.
Any pullback in the Chinese economy is speculation at this point.
Because of this, I still love both of these stocks to start this year and this decade.
