Manulife: A 5.2% Yielding Blue Chip Too Cheap To Ignore

Written by Summary

Today I want to share with you the three reasons why Manulife is one of the best high-yield blue chips you can safely buy in these troubled times.

Analysts expect the stock to deliver 32% total returns in the next year and potentially triple over the next half decade.

It’s as close to a perfect high-yield blue chip opportunity on Wall Street today.

I do much more than just articles at iREIT on Alpha: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »

Riddy/iStock via Getty Images This article was coproduced with Dividend Sensei.

The correction of 2022 is now 65 days old and could potentially last another eight to 10 weeks, according to Morgan Stanley and JPMorgan.

Why?

Well, there are many bricks in Wall Street’s wall of worry, but one of the biggest is inflation.

Thanks to the supply chain disruptions of the pandemic, combined with record excess savings from trillions in stimulus and a booming economy, inflation has soared to 7.9%.

Even excluding volatile food and fuel costs, core inflation is 6.4%. And thanks to soaring energy prices, largely a result of Russia’s invasion of Ukraine, Goldman Sachs thinks inflation could get a bit worse in the next month.

Goldman estimates that we could see about 8.5% inflation in March , and in a worst-case scenario of $200 crude, about 10.5% in the coming months.

But guess what?

High inflation tends to cause rising interest rates and that’s a boon to financial blue chips like Manulife Financial ( MFC ). YCharts In fact, value tends to do best relative to growth when rates are rising, and you can see that from MFC’s 4% gains this year, which are 20% better than the Nasdaq.

Today I want to share with you the three reasons why Manulife is one of the best high-yield blue chips you can safely buy in these troubled times.

Not only does it offer a very safe 5.2% yield today, but it could help you retire in safety and splendor in the coming years and decades.

In fact, MFC is an anti-bubble Buffett-style “fat pitch” that analysts expect to deliver 32% total returns in the next year and potentially triple over the next half-decade.

Or to put it another way, Manulife Financial is a 5.2% yielding blue-chip set to soar and too cheap to ignore. Reason One: One Of The World’s Highest Quality Companies

The Dividend Kings’ overall quality scores are based on a 238-point model that includes: dividend safety balance sheet strength credit ratings credit default swap medium-term bankruptcy risk data short and long-term bankruptcy risk accounting and corporate fraud risk profitability and business model growth consensus estimates historical earnings growth rates historical cash flow growth rates historical dividend growth rates historical sales growth rates cost of capital long-term risk-management scores from MSCI, Morningstar, FactSet, S&P, Reuters’/Refinitiv and Just Capital management quality dividend friendly corporate culture/income dependability long-term total returns (a Ben Graham sign of quality) analyst consensus long-term return potential It actually includes more than 1,000 metrics if you count everything factored in by 12 rating agencies we use to assess fundamental risk. dividend/balance sheet/risk ratings make up 82% of the DK safety and quality model How do we know that our safety and quality model works well?During the two worst recessions in 75 years, our safety model predicted 87% of blue-chip dividend cuts during the ultimate baptism by fire for any dividend safety model.How does MFC score on one of the world’s most comprehensive safety models? MFC Dividend Safety Rating Dividend Kings Safety Score (147 Point Safety Model) Approximate Dividend Cut Risk (Average Recession) Approximate Dividend Cut Risk In Pandemic Level Recession 1 – unsafe 0% to 20% over 4% 16+% 2- below average 21% to 40% over 2% 8% to 16% 3 – average 41% to 60% 2% 4% to 8% 4 – safe 61% to 80% 1% 2% to 4% 5- very safe 81% to 100% 0.5% 1% to 2% MFC 91% 0.5% 1.5% Risk Rating Low Risk (84th industry percentile consensus) A stable outlook credit rating 0.66% 30-year bankruptcy risk 15% OR LESS Max Risk Cap Recommendation Long-Term Dependability Company DK Long-Term Dependability Score Interpretation Points Non-Dependable Companies 21% or below Poor Dependability 1 Low Dependability Companies 22% to 60% Below-Average Dependability 2 S&P 500/Industry Average 61% (58% to 70% range) Average Dependability 3 Above-Average 71% to 80% Very […]

source Manulife: A 5.2% Yielding Blue Chip Too Cheap To Ignore