Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

1 Top TSX Undervalued Stock to Buy Right Now

Stock MarketsAug 20, 2021 19:15
Saved. See Saved Items.
This article has already been saved in your Saved Items
1 Top TSX Undervalued Stock to Buy Right Now

As we (hopefully) head toward the other side of the pandemic, investors are largely looking for a top undervalued stock to put in their portfolios. As it happens, the TSX has a few great options to choose from right now.

However, picking the right one for a specific portfolio isn’t that easy.

In this article, I’m going to highlight why I think Manulife Financial (TSX:MFC)(NYSE:MFC) is a top undervalued stock to consider right now.

Excellent fundamentals driving this undervalued stock Manulife Financial is one of the top life insurance companies around the world, with a market capitalization of approximately $48 billion. The company provides health insurance, life insurance, annuity, pension, and more in North America and Asia.

What’s increasingly important for investors to focus on with Manulife is the company’s international operations. Indeed, approximately 35% of the company’s revenue comes from its Asia operations. And Manulife has recently made a bigger investment in its Asian insurance arm to grow in this high-growth market.

Accordingly, Manulife’s valuation of less than seven times earnings looks absurd in this context. The fact that Manulife stock pays out a dividend yield of 4.5% makes this an extremely undervalued stock to considered today. Indeed, Manulife ticks most of the boxes for conservative long-term investors today.

Better-than-expected Q2 earnings As an insurance company, Manulife has been hit hard by the pandemic. A reversion toward near-zero interest rates isn’t a great thing for insurers. This is because companies like Manulife earn money on the spread between what they earn on their invested premiums (before claims).

However, with interest rates expected to rise soon, Manulife’s outlook remains strong. Additionally, this past quarter, the company posted impressive results relative to the current environment.

The company’s wealth and asset management operations saw revenue growth of nearly 50% to $356 million in the three-month period ending on June 30. Manulife’s earnings received a boost due to 7.6% growth in its Asian operations. This increase has helped the life insurer to make up for its drop in core earnings in the U.S. and Canada. Nevertheless, Manulife’s earnings fell by 21% and 7% in the U.S. and Canada, respectively. This drop was expected.

Bottom line Manulife’s stock price has surged nearly 15% in the current year. However, I think there’s a lot more room for this undervalued stock to run.

Indeed, given the company’s current valuation and positioning coming out of this pandemic, I think Manulife could be a real long-term winner for investors at these levels. The company’s strong market share in Asia and a recovery in its North American business is positive. Indeed, Manulife is a top pick on many fronts. This is a growth, value, and income play. Such a stock is simply very hard to find today.

The post 1 Top TSX Undervalued Stock to Buy Right Now appeared first on The Motley Fool Canada.

Fool contributor Chris MacDonald has no position in any stocks mentioned in this article.

This Article Was First Published on The Motley Fool

1 Top TSX Undervalued Stock to Buy Right Now

Related Articles

Is Lightspeed (TSX:LSPD) Stock Price Still a Buy?
Is Lightspeed (TSX:LSPD) Stock Price Still a Buy? By The Motley Fool - Dec 05, 2021

Lightspeed Commerce (TSX:TSX:LSPD)(NYSE:LSPD) stock has been in a downward spiral for months. Currently trading for $64, it’s down 59% from its all-time high. The...

Could This Retail Stock Become a Tech Stock?
Could This Retail Stock Become a Tech Stock? By The Motley Fool - Dec 05, 2021

The line between retail and technology has been blurring for years. Nearly everything you can buy in a store is now also available online on the store’s website. This is...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email