Canada’s stock markets fell when the Bank of Canada pushed the loonie to a near four-month low at the end of April. A dovish outlook from the Bank of Canada led to the S&P/TSX composite index losing 82.88 points.
The Bank of Canada announced that the target interest rate will be held at 1.75%, with potential future rate hikes dropped from the statement.
The TSX is dominated by financials, with the following three insurance stocks offering some of the best returns for low-risk investors.
1. Sun Life Financial Inc. (TSX:SLF)
Sun Life is up over 22% year-to-date and operates primarily in the health and life insurance sectors. The company’s earnings are expected on May 8, 2018 after the markets close. A conference call will be held the following day for investors.
The company’s annual report shows that it has $951 billion assets under management, and dividend per common-share is on the rise. Dividends have risen from $1.44 a common share in 2014 to $1.91 a share in 2018.
Underlying net income has risen by over C$1 billion between 2014 and 2018, with net income in 2018 of C$2.947 billion.
Sun Life’s financials in the first-quarter are expected to beat expectations. The company’s quarterly earnings in 2018 posted surprise earnings for all four quarters. The company posted C$1.19 earnings per share in the final quarter of 2018, beating expectations of C$1.15 earnings per share. The company’s sales growth in India, Hong Kong and the Philippines led to 26% growth in the Asian market.
The company’s Asian market growth and strong market share in Canada make it a low-risk investment for most.
2. Intact Financial Corporation (TSX:IFC)
Intact serves the casualty and property insurance market. The company’s expected annual growth in 2018 was 20.2%. The company has performed exceptionally well to start 2019, rising over 10% year-to-date.
The company offers Calgary home insurance as well as other regional products to Canadian residents, including business, home and auto insurance. Debt-to-capital ratios remained at 22.0% at the end of 2018. Net investment income rose to C$529M, up 22% on the year, while net distribution income rose to $146M, up 11%.
The company holds 17% market share in Canada, with 2018 DPW of $8.6 billion. Personal auto insurance accounted for 44% of the company’s DPW, while personal property and commercial lines account for 25% and 31% respectively.
Intact’s financials remain strong with positive stock price growth and a diverse portfolio of insurance products available.