Sun Life Earnings: Shares Correct 9% on Underwhelming Results in the US Business

We continue to view Sun Life stock as overvalued.

Suryansh Sharma 14 February, 2025 | 4:41PM
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A logo sign outside of a facility occupied by Sun Life Financial, Inc., in Wellesley, Massachusetts.

Key Morningstar Metrics for Sun Life Financial


What We Thought of Sun Life Financial’s Earnings

Sun Life Financial SLF reported lackluster numbers in the fourth quarter, as underlying net income came at C$0.97 billion or $C1.68 per share during the quarter—flat compared with the previous year. The firm reported an adjusted return on equity of 16.5%.

Why it matters: The company’s asset management arm reported strong capital raising and impressive growth on buoyant asset valuations, but the US business had subdued profitability.

  • Overall, assets under management grew by around 10% during the fourth quarter compared with the previous year’s C$1.54 trillion. Profitability in the wealth and asset management business was around 11% higher on a year-over-year basis due to higher fee income.
  • The US business reported underlying profits of C$161 million during the quarter compared with an average of C$216 million in the past four quarters. The decline can be attributed to unfavorable morbidity experiences in the medical stop-loss business, driven by claims severity.

The bottom line: We are maintaining our fair value estimate of C$66 per share and continue to believe that the stock is slightly overvalued.

  • Higher interest rates have been a tailwind for the company in the past few quarters, resulting in higher investment earnings. Lower rates would be a net negative.
  • Any significant correction in capital markets would also substantially impact the company, given its high exposure to the asset and wealth management business.

Key stats: The company reported an impairment charge of C$186 million on intangible assets related to bancassurance in Vietnam due to changes in regulatory and macroeconomic factors in the country.

  • Sun Life paid a quarterly dividend of C$0.84 per share in the fourth quarter, up 3.7% sequentially, representing a 4.4% dividend yield, per the current stock price.


The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.

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Suryansh Sharma  Suryansh Sharma is a senior equity analyst for Morningstar.

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