Tag Archives: TSX:MFC

What’s Wrong with Manulife stock’s Big Dividend?

When the World Health Organization announced that the world was experiencing a pandemic around March 2020, the regulator tightened restrictions to prevent federally regulated financial institutions like Manulife (TSX:MFC)(NYSE:MFC) from increasing their dividends. This is why the life and health insurance company froze its dividend for eight consecutive quarters.

When the regulator lifted the ban about a month ago, Manulife quickly announced a dividend increase of almost 17.9%. Its new quarterly dividend is C$0.33 per share, equating to an annualized payout of C$1.32 per share. The negative sentiment around the stock market in the last week pressured this dividend stock lower. Consequently, investors can now buy shares for a juicy dividend yield that’s flirting with 5.7%.

The dividend stock is not a darling

For some reason, Manulife stock tends to trade at a substantial discount to its peer, Sun Life (TSX:SLF)(NYSE:SLF). Maybe it’s because of their different business mix. Sun Life’s business is much more diversified, leading to more quality earnings. Here’s an overview of Sun Life’s net income diversification.

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