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Should You Be Holding Manulife Financial Corporation (TSE:MFC)?

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As an investor, I look for investments which does not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of Manulife Financial Corporation (TSE:MFC), it is a company that has been able to sustain great financial health, trading at an attractive share price. Below is a brief commentary on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, read the full report on Manulife Financial here.

Very undervalued with adequate balance sheet

MFC is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This suggests prudent control over cash and cost by management, which is a crucial insight into the health of the company. MFC’s has produced operating cash levels of 0.99x total debt over the past year, which implies that MFC’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings. MFC’s share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of MFC’s earnings, investors now have the opportunity to buy into the stock to reap capital gains. Also, relative to the rest of its peers with similar levels of earnings, MFC’s share price is trading below the group’s average. This supports the theory that MFC is potentially underpriced.

TSX:MFC Intrinsic value, March 26th 2019
TSX:MFC Intrinsic value, March 26th 2019

Next Steps:

For Manulife Financial, I’ve put together three pertinent factors you should further research:

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  1. Future Outlook: What are well-informed industry analysts predicting for MFC’s future growth? Take a look at our free research report of analyst consensus for MFC’s outlook.

  2. Historical Performance: What has MFC’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.

  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of MFC? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.