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Asian investments carry Sunlife forward

The Far East contributed 27% of SunLife's profit in 2021 and continues to grow in importance.

Sun Life Financial (TSX, NYSE: SLF) is Canada’s second largest insurance company and provides a range of life, health, and travel insurance plus financial advice and pension and wealth management.

It operates in seven Asian markets and while Canadian operations contribute the most to profit, Asia contributed 27% of reported net income in 2021 and continues to grow in importance.

Here’s an update:

Performance:  The shares are down 16% year-to-date at the current price of $61.82.

Recent developments: In its third quarter Sun Life beat profit estimates as growth in its insurance business, particularly in the US and Asia, compensated for weakness in its wealth management business.

On a year-over-year basis, profit rose 5% to $949 million or $1.62 per share, beating the consensus estimate of $1.47.

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Sun Life CEO Kevin Strain said in a statement that stock market volatility triggered by sharply rising interest rates hurt Sun Life’s wealth business. Core profit fell 19%, and assets under management fell 8%. But Sun Life’s overseas expansion has helped diversify its business mix and the latest earnings benefited from recent deals.

 Dividend: Sun Life announced a 3 cent or 4.3% increase in the quarterly dividend to $0.72, payable on Dec. 30. The yield is 4.66% at current prices.

Outlook: Sun Life has a strong core business in Canada and the US and continues to benefit from a growing middle class in Asia where demand for insurance and investment products is rising with incomes. 

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This article appeared in the Internet Wealth Builder on Nov.14, 2022.  For information on how to reprint this article please view this page.

Adam Mayers writes about investing and personal finance. He is a contributor to the Globe & Mail’s Globe Advisor and a contributing editor to Gordon Pape's Internet Wealth Builder newsletter. Adam was Business Editor and investment columnist at The Toronto Star and is the author of six books.

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