Sun Life Stock Is Paying $3.24 Per Share in Dividends: Time to Buy the Stock?

Sun Life (TSX:SLF) stock recently bumped its dividend upwards by 4%, creating even more value for investors today.

Amy Legate-Wolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote: “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published July 22, 2024 9:45 pm EDT

For Canadian investors looking at both growth in returns and dividends this year, insurance companies were the place to look. Among them, Sun Life Financial (TSX:SLF) proved to be a top performer.

The financial services and insurance company now offers an annual dividend of $3.24 per share. It also offers returns of 13% from 52-week lows. So, with more room to run towards 52-week highs and trading at just 13.09 times earnings, is it time to buy Sun Life stock?

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Strength in the numbers

Sun Life Financial presents a compelling investment opportunity due to its strong financial performance, attractive dividend yield, and strategic growth initiatives. The company’s solid capital position and proactive management strategies make it a reliable choice for investors seeking stable income and long-term growth potential.

Sun Life Financial reported a solid first quarter in 2024. The company achieved an underlying net income of $875 million, demonstrating resilience despite a 2% decline from the previous year. Reported net income increased by 1% to $818 million, reflecting the company’s effective cost management and operational efficiency. Additionally, Sun Life’s assets under management (AUM) reached $1.470 billion, an 8% increase from the previous year, underscoring the company’s strong growth trajectory in wealth and asset management.

Sun Life Financial offers a compelling dividend yield, which was recently increased from $0.78 to $0.81 per share. This 4% increase highlights the company’s commitment to returning value to shareholders. The current dividend yield stands at approximately 4.68%, making it an attractive option for income-focused investors. Furthermore, the company’s robust capital position supports its ability to continue paying and potentially increasing dividends in the future.

More growth to come

Beyond current performance, more should be on the way. Sun Life has been proactive in its strategic initiatives, including the expansion of its asset management and insurance businesses. The recent sale of Sun Life U.K. and the end of the Public Health Emergency in the U.S. have provided the company with opportunities to refocus on core areas, leading to improved operational efficiency and profitability.

Additionally, Sun Life’s commitment to sustainable investing and advancing health and wellness initiatives aligns with long-term global trends, positioning the company for sustained growth. The company has launched various initiatives to improve client experiences and expand its digital capabilities. Notable examples include the introduction of a groundbreaking insurance solution tailored for Canadians living with diabetes, which offers a higher chance of approval and personalized care.

Bottom line

So, not only does Sun Life stock offer growth at a valuable price, but it also offers even more in the future. With a focus on healthcare and a commitment to growing its businesses and divesting when appropriate, it’s created a strong balance sheet.

Sun Life stock has, therefore, been able to grow its dividend while holding value for investors. It currently trades at just 1.46 times sales and 1.67 times book value. With a strong 10.12% profit margin and only 40% of equity needed to cover its debts, it’s a solid stock, especially when it comes to dividends.