MFC vs. SLF: Which Stock Is the Better Value Option?

Investors interested in Insurance - Life Insurance stocks are likely familiar with Manulife Financial (MFC) and Sun Life (SLF). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, both Manulife Financial and Sun Life are sporting a Zacks Rank of #2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. However, value investors will care about much more than just this.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

MFC currently has a forward P/E ratio of 10.54, while SLF has a forward P/E of 11.57. We also note that MFC has a PEG ratio of 1.05. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. SLF currently has a PEG ratio of 1.65.

Another notable valuation metric for MFC is its P/B ratio of 1.66. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, SLF has a P/B of 2.3.

Based on these metrics and many more, MFC holds a Value grade of A, while SLF has a Value grade of C.

Both MFC and SLF are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that MFC is the superior value option right now.

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This article originally published on Zacks Investment Research (zacks.com).

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