Sun Life Financial Hits 52-Week High on Consistent Performance - Analyst Blog


On Jun 30, shares of Canadian life insurer Sun Life Financial Inc. ( SLF ) touched a 52-week high of $36.87. With about 0.16 million shares exchanging hands in the last trading session, shares finally closed at $36.71. The closing share price represents a strong one-year return of 27.6%.  

The rally came on the back of investors' optimism about the company's consistent favorable performance.

Sun Life Financial delivered positive earnings surprises in the last three quarters with an average beat of 14.8%. This Zacks Rank #2 (Buy) company with market cap of $22.4 billion promises long-term earnings growth expectation of 10.0%.

Sun Life Financial has been able to maintain its growth momentum by taking a series of initiatives. Recently, the company made business mix changes in its U.S. segment to reduce the equity market exposure and limit its interest rate exposure.

Additionally, its Global Asset Management Business is witnessing expanding asset base for several quarters and provides higher return on equity with lower capital, and lower volatility. The Canadian insurance company also implemented hedging techniques to reduce earnings and capital sensitivity to interest rates and equity markets.

Sun Life Financial also scores strong with the credit rating agency. In May 2014, A.M. Best Co. reiterated the company's issuer credit rating (ICR) of "a-", while maintaining the financial strength rating (FSR) of A+ (Excellent) and ICR of "aa-" of its subsidiaries. The ratings carry a stable outlook, reflecting the company's strong business profile.

In the last reported quarter, Sun Life Financial performed strongly on both lines. Operating earnings were up 10.8% year over year, led by strong business growth, improving core earnings power and continued execution of the company's four-pillar growth strategy. Top-line growth was robust, with sales of life and health products up 19% and wealth sales up 12%.

Estimate Revisions

Over the past 60 days, the stock has witnessed upward revision in earnings estimates, reflecting its consistent operating performance. The Zacks Consensus Estimate for 2014 went up 3.1% to $2.68 per share and 2.1% to $2.86 per share for 2015

Other Stocks to Consider

Other stocks from the same industry worth considering are China Life Insurance Co. Ltd. ( LFC ), Lincoln National Corp. ( LNC ) and Reinsurance Group of America Inc. ( RGA ). All these stocks carry the same rank as Sun Life Financial.

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REINSURANCE GRP (RGA): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: SLF , LNC , LFC , RGA

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