Top Morningstar Indicators for Manulife Financial
Our opinion on Manulife’s results
Manulife reported satisfactory fourth-quarter results, with adjusted earnings per share of 1.12 Canadian dollars, up 9% from the previous year. The company’s full-year 2025 results translate into an adjusted return on equity of 16.5%, below its mid-term level of over 18%.
Why is this important? The Asia segment continued to be a strong growth driver for the company, with adjusted profit up 24% from the previous year. The US segment, however, faced headwinds due to lower investment margins and unfavorable insurance experience.
- The global wealth and asset management business, which accounts for about a quarter of the company’s adjusted profits, reported a 7% increase in core profits from a year earlier. However, net outflows reached CA$9.5 billion during the quarter, mainly due to large buybacks.
- Canadian segment adjusted profit increased 6% from the prior-year quarter, broadly in line with our expectations.
Conclusion : Given the fourth quarter results, we expect to increase our fair value per share estimate for Manulife, which does not have an economic moat rating, by 5% to C$41.10. We believe the stock will remain overvalued after updating our rating.
- Although the company’s Asian segment has reported double-digit growth in adjusted earnings in recent quarters, our long-term normalized growth forecast for Asia is in the high single-digit range.
Between the lines: Manulife’s 2025 rebates were CA$6.4 billion, and we believe the company is on track to meet or exceed its CA$22 billion target for 2024-2027.
- For 2025, the company has returned approximately CA$5.4 billion to its shareholders in dividends and share repurchases, or approximately 72% of its core earnings. Alongside the release of its fourth quarter results, Manulife announced a 10% increase in its dividend per share.
- We expect strong cash flow generation to continue to support dividends and share repurchases in 2026, with a total payout ratio for the company of 65% to 75% of adjusted earnings.
Articles translated using AI tools may not be proofread by someone fluent in the translated language, and their accuracy cannot be guaranteed. Translated articles are provided for informational purposes only. In the event of any discrepancy, the article in the original language will prevail.
Editor’s note: This analysis was originally published as an analyst note by Morningstar Equity Research.
The author(s) have no ownership interest in any securities mentioned in this article. Learn more about Morningstar’s editorial policies.
date: 2026-02-12 22:08:00
Worth a look