Is Manulife Stock a Good Buy?

Here’s what’s behind Manulife stock’s surge in 2024 and why it could still be a smart buy for your portfolio.

| More on:
3 colorful arrows racing straight up on a black background.

Source: Getty Images

Manulife Financial (TSX:MFC) is continuing to outperform the broader market by a wide margin in 2024. MFC stock currently trades with 51% year-to-date gains compared to the S&P/TSX Composite Index’s 18% advances so far this year. With this, it currently trades at $44.24 per share with a market cap of $78.1 billion. Besides its strong financial growth trends, declining interest rates have also contributed to Manulife stock’s recent outperformance, as lower rates tend to support the profitability of insurance companies.

But with such a strong performance, the big question for investors is whether it’s too late to buy in or if Manulife stock still has room to inch up. In this article, I’ll break down what’s behind Manulife stock’s surge in 2024 and discuss whether it could still be a smart buy for your portfolio.

Manulife stock’s rally in 2024

Despite global macroeconomic uncertainties, Manulife’s financial performance in 2024 has been nothing short of impressive. Last week, the Toronto-based insurance giant reported record adjusted net profit for the third quarter, reaching $1.83 billion, up 8.2% YoY (year over year). This growth was driven by a range of factors, including significant increases in new business and strong global wealth management results, particularly in Asia.

Clearly, one of the key drivers behind Manulife stock’s recent surge is the strong performance of its insurance businesses across Asia, Canada, and the United States. In Asia, where the company has a strong presence, the company saw record sales, with its annual premium equivalent sales up by 64% YoY and new business value advancing by 55% compared to the same quarter last year. In addition to its latest product launches for high-net-worth clients, Manulife’s growth in Asia was primarily fueled by strong demand in markets like Hong Kong, mainland China, and Singapore.

Focus on expansion and digital initiatives

Manulife stock’s solid performance this year could also be a result of its recent strategic focus on digital innovation and expansion into high-growth markets. In Asia, Manulife has been aggressively expanding its product lineup and digital capabilities to better serve its growing customer base. For example, the company recently rolled out a series of digital tools and mobile applications across key markets like Vietnam, Indonesia, and the Philippines. These tools not only make it easier for customers to manage their policies but also streamline premium payments and claim processes, which ultimately leads to customer engagement and satisfaction. In addition, these initiatives could help Manulife capture a larger share of the digitally savvy, younger demographic in these rapidly growing markets.

In the U.S. market, Manulife recently entered a strategic partnership with the tech firm Ethos to streamline the life insurance application process. Through the Ethos platform, Manulife is offering customers simplified access to its Simple Term product.

Is Manulife stock a good buy now?

Although Manulife stock has seen solid gains this year, you may wonder if it still offers upside potential or if it’s already reached a peak. While short-term macroeconomic challenges remain, Manulife’s growth trajectory, strategic initiatives, and strong fundamentals suggest the stock may still have room to run. In addition to its upside potential, Manulife’s stable annualized dividend yield of 3.6% makes it an even more attractive stock for income-focused, long-term investors.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Jitendra Parashar has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Investing

Man data analyze
Tech Stocks

3 Reasons Celestica Stock Is a Screaming Buy Now

These three reasons make Celestica stock a screaming buy for long-term investors.

Read more »

profit rises over time
Dividend Stocks

These 2 Dow Stocks Are Set to Soar in 2025 and Beyond

Two Dow Jones stocks are screaming buys but Canadians must hold them in an RRSP or RRIF to avoid paying…

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Dividend Stocks

How to Use Your TFSA to Earn Ultimate Passive Income

If you have a TFSA, then you have the key to creating ultimate passive income. All you need is a…

Read more »

Confused person shrugging
Dividend Stocks

Better Buy: Fortis Stock or Hydro One Stock?

Let's do a compare and contrast of these two top utilities stocks right now, shall we?

Read more »

A close up color image of a small green plant sprouting out of a pile of Canadian dollar coins "loonies."
Dividend Stocks

Boost Your Passive Income: 2 Canadian High-Yielders at a Bargain

Nutrien (TSX:NTR) stock and another play that appear like fantastic dividend bargains in mid-November.

Read more »

Super sized rock trucks take a load of platinum rich rock into the crusher.
Metals and Mining Stocks

Invest $7,000 in This Dividend Stock for $672 in Passive Income

High yield can be an essential requirement when you need to start even a modestly sized passive income with a…

Read more »

telehealth stocks
Tech Stocks

Well Health Stock: Buy, Sell, or Hold?

Another record-breaking quarter and strong demand sets the stage for continued momentum for Well Health stock.

Read more »

3 colorful arrows racing straight up on a black background.
Dividend Stocks

TSX Stocks Soaring Higher With No Signs of Slowing

Three TSX stocks continue to beat the market and could soar higher in an improving investment landscape.

Read more »