September 21, 2023
Top 10 Stock Sun Life Financial Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Sun Life Financial – Top 10 Stock in SDG 7: Affordable and Clean Energy
Sun Life Financial is listed as a top 10 stock on September 21, 2023 in the market index SDG 7 because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company enjoys a positive professional investor sentiment, but all financial facts speak against a stock purchase. This is probably an investment into the future. Based on the Obermatt 360° View of 100 (top 100% performer), Obermatt assesses an overall strong buy recommendation for Sun Life Financial on September 21, 2023.
Snapshot: Obermatt Ranks
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Sun Life Financial Strong Buy
| 360 METRICS | September 21, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 38 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 47 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 32 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 100 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 100 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 100 (better than 100% compared with alternatives) for 2022, overall professional sentiment and financial characteristics for the stock Sun Life Financial are very positive. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Sun Life Financial. The consolidated Sentiment Rank has a good rank of 100, which means that professional investors are more optimistic about the stock than for 100% of alternative investment opportunities. But all other ranks are below average. The consolidated Value Rank has a rank of 38, which means that the share price of Sun Life Financial is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 47, meaning that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. This means that growth is lower than for 47% of competitors in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 32 which means that the company has a riskier financing structure than 68% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 100, Sun Life Financial is better positioned than 100% of all alternative stock investment opportunities based on the Obermatt Method. As only the professional market sentiment (Sentiment Rank of 100) is above-average, and all other consolidated Obermatt Ranks are below peers, the stock investing proposition case is rather weak. The stock price is expensive for a company of this size in this industry, visible in the below-average Value Rank. Growth is below the competition based on the Growth Rank, and the company has more debt than other companies, according to the Safety Rank. So the question becomes: How important is the Sentiment Rank when all others are below average? When it comes to growth, the low rating might be justified if growth is expected in the future and not yet reflected in current performance. This is often the case for companies with intellectual property, such as technology and pharmaceutical companies. In the early phases, these companies are expensive compared with their size and may have a lot of debt on their books, as is the case here, as seen in the low Value and Safety Ranks. Future growth may be the strongest investment rationale in this case, which is only reflected by institutional investors' opinions. You pay more than the market average for this stock and invest in a rather debt-loaded enterprise, but it may be worth it if the future of Sun Life Financiaḷ is bright. A small investment might be justified, but proceed with caution. ...read more
Sentiment Strategy: Professional Market Sentiment for Sun Life Financial very positive
ANALYSIS: With an Obermatt Sentiment Rank of 100 (better than 100% compared with alternatives) for 2022, overall professional sentiment and engagement for the stock Sun Life Financial is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Sun Life Financial. Analyst Opinions are at a rank of 72 (better than 72% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 75, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Sun Life Financial. The Professional Investors rank is 94, which means that currently, professional investors hold more stock in this company than in 94% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 97 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 97% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 100 (more positive than 100% compared with investment alternatives), Sun Life Financial has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Sun Life Financial stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Sun Life Financial Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 38 (worse than 62% compared with alternatives), Sun Life Financial shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Sun Life Financial. Price-to-Profit (also referred to as price-earnings, P/E) is 63 which means that the stock price compared with what market professionals expect for future profits is lower than for 63% of comparable companies, indicating a good value concerning Sun Life Financial's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 30, which means that the stock price is lower as regards to invested capital than for 30% of comparable investments. On the other hand, Price-to-Sales is less favorable than 83% of alternatives (only 17% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 14% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 38, is a hold recommendation based on Sun Life Financial's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more
Growth Strategy: Sun Life Financial Growth Momentum low
| GROWTH METRICS | September 21, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 23 |
|
||||||
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 34 |
|
||||||
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 51 |
|
||||||
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 71 |
|
||||||
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 47 |
|
||||||
ANALYSIS: With an Obermatt Growth Rank of 47 (better than 47% compared with alternatives), Sun Life Financial shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Sun Life Financial. Capital Growth has a rank of 51, which means that currently professionals expect the company to grow its invested capital more than 34% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 71 (above 71% of alternative investments). But Sales Growth has only a rank of 23, which means that, currently, professionals expect the company to grow less than 77% of its competitors, and Profit Growth is also low at a rank of 34. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 47, is a hold recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Sun Life Financial, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: Sun Life Financial Debt Financing Safety below-average
| SAFETY METRICS | September 21, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 73 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 88 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 91 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 32 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 32 (better than 32% compared with alternatives), the company Sun Life Financial has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Sun Life Financial is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for Sun Life Financial. Leverage is at 73, meaning the company has a below-average debt-to-equity ratio. It has less debt than 73% of its competitors. Refinancing is at a rank of 88, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 88% of its competitors. Finally, Liquidity is also good at a rank of 91, which means that the company generates more profit to service its debt than 91% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 32 (worse than 68% compared with alternatives), Sun Life Financial has a financing structure that is riskier than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: Sun Life Financial Lowest Financial Performance
| COMBINED PERFORMANCE | September 21, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 38 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 47 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 91 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 21 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 21 (worse than 79% compared with investment alternatives), Sun Life Financial (Life & Health Insurance, Canada) shares have lower financial characteristics compared with similar stocks. Shares of Sun Life Financial are low in value (priced high) with a consolidated Value Rank of 38 (worse than 62% of alternatives), show below-average growth (Growth Rank of 47), and are riskily financed (Safety Rank of 32), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 21, is a sell recommendation based on Sun Life Financial's financial characteristics. As the company Sun Life Financial's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 38), low growth (Obermatt Growth Rank of 47), and risky financing practices (Obermatt Safety Rank of 32), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. ...read more
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.