What Are the Fundamentals Of MFC?

Manulife Financial logged a -1.8% change during today's afternoon session, and is now trading at a price of $19.68 per share. The S&P 500 index moved 1.3% and the Nasdaq posted a 3.2% change.

Manulife Financial shares moved -3.5% over the last 52 weeks, with a high of $22.19 and a low of $14.92. During this time, the stock outperformed the S&P 500 index by 4.5%. As of January 2022, the company's 50-day average price is $18.0. Manulife Financial Corporation, together with its subsidiaries, provides financial products and services in Asia, Canada, the United States, and internationally. The large-cap Financial Services company has 38,000 full time employees and is based in Toronto, Canada. Manulife Financial has returned a 6.3% dividend yield over the last 12 months.

The Company Has a Steady Stream of Strong Cash Flows:

2019-12-31 2020-12-31 2021-12-31
Revenue (MM) $77,822 $77,121 $59,841
Revenue Growth n/a -0.9% -22.41%
Net Margins 6.77% 6.91% 11.12%
Net Margins Growth n/a 2.07% 60.93%
Earnings Per Share $2.77 $2.93 $3.54
EPS Growth n/a 5.78% 20.82%
Free Cash Flow (MM) $20,542 $20,048 $23,155
FCF Growth n/a -2.4% 15.5%
LT Debt to Equity 0.26 0.29 0.23

Manulife Financial Is Currently Under Priced:

Compared to the Financial Services sector's average of 13.34, Manulife Financial has a trailing twelve month P/E ratio of 7.0 and, according to its EPS guidance of 2.45, an expected P/E ratio of 8.0. Manulife Financial's PEG ratio is -5.25 based on its -1.33% annual average growth rate of historical and projected earnings per share. However, we believe that it is more prudent to calculate the PEG ratio using the broader market's 5-year expected EPS growth rate of 13.05%, because the growth rate implied by Manulife Financial's past and expected EPS is probably not sustainable. This more prudent approach shows a PEG ratio of 0.53, which still suggests that company's shares are possibly undervalued.

Furthermore, Manulife Financial is likely undervalued in terms of its equity because its P/B ratio is 0.7 compared to its sector average of 1.95. The company's shares are currently trading -55.0% below their Graham number, implying there is a margin of safety for the stock. The Graham number is calculated according to the formula:

√(22.5 * 3-year average EPS * book value per share) = √(22.5 * 3.08 * 27.623) = $43.75

Most of the Market Indicators on Manulife Financial Are Negative:

3 analysts are following Manulife Financial and have set target prices ranging from $18.78 to $20.28 per share. On average, they have given the company a rating of hold. At the current price of $19.68, MFC is trading 0.79% away from its average analyst target price of $19.53 per share, implying an analyst consensus of little upside potential for the stock.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.