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.
