Thursday, July 31, 2008

Sun Life breaks dividend trend

One day after Canadian wealth manager IGM financial continued their habit of semi-annual dividend raises, fellow financial services firm Sun Life Financial (SLF) appears to have decided to break their similar trend. Sun Life has been raising dividends twice annually since 2004. After reporting a 12% profit drop in their most recent quarter, Sun Life failed to raise their dividend, likely marking an end to the semi-annual trend. Sun Life is currently yielding 3.6%. The stock was punished today as it fell by 6.1% to close under $40/share.


pitz said...

If assets are theoretically 'cheap', then this is a good move on SLF's part, to build up their balance sheet. They won't be buying AIG or anything like that, but certainly there are opportunities in insurance that they can exploit from their position of relative strength.

MG (moneygardener) said...

Perhaps. Maybe an acquisition in India or China, but more likely in the U.S. is in the cards. The dividend pay out ratio looks fine.