Sun Life Financial SLF is riding on strong foothold in Asia, expanding global asset management and a solid financial position. The company currently carries an impressive VGM Score of B. Here V stands for Value, G for Growth and M for Momentum, with the score being a weighted combination of all three factors.
Return on equity of 13.8% in the trailing 12 months was better than the industry average of 11.4%, reflecting the company’s efficiency in utilizing shareholders’ funds. It estimates generating underlying ROE of 12-14% over the medium term.
Why Hold is an Apt Strategy?
This Zacks Rank #3 (Hold) life insurer expects to witness underlying earnings per share rise of 8-10% per annum over the medium term. The expected long-term earnings growth is pegged at 9%, higher than the industry average of 5.5%. It has a favorable Growth Score of B. This style score analyzes the growth prospects of the company.
The third largest insurer in Canada remains focused on the emerging economies that are expected to provide higher return than the North American markets. Continuous strategic investments in Asia are in tandem with its growth strategy. It is shifting focus toward products that park lower capital and offer more predictable earnings. Aiming a spot within top five players, the company is growing its voluntary benefits business.
Sun Life is aggressively trying to boost its Global Asset Management Business, which has been witnessing a rise in asset base for the past quarters. The company currently has $1.1 trillion worth of assets under management.
Acquisitions have been an important part of the company’s growth strategy. It acquired a majority stake in InfraRed Capital Partners to broaden management suite of alternative investment solutions. It is also contemplating to acquire Crescent Capital Group, the $28-billion worth credit manager, per sources. This