Sun Life Financial (TSE: SLF) (SLF) is a Canadian financial services company and is one of the world’s largest insurers. The company provides life and health insurance as well as wealth and asset management solutions to individuals and corporate clients globally.
On Wednesday, the company announced that it had completed the acquisition of DentaQuest, which is the second-largest dental benefits provider in the U.S. Sun Life purchased DentaQuest for US$2.475 billion as part of a plan to expand its American operations.
Sun Life expects the acquisition to add C$0.17 to its earnings per share figure and 0.42% to its return on equity metric. This demonstrates that the acquisition will immediately create value for shareholders. Furthermore, it is expected to add C$0.24 to its earnings per share and 0.5% to the return on equity once synergies are realized in 2024.
Sun Life Has an Attractive Dividend Yield
Investors that are interested in income-generating assets might like Sun Life’s 4.32% annualized dividend yield. When looking at its dividend yield trend, you can see that it has remained fairly steady over the past several years.
As a result, its current yield suggests that the stock is reasonably priced relative to yields investors have seen in the past.
Analyst Recommendations
Sun Life has a Moderate Buy consensus rating based on seven Buys, three Holds, and one sell assigned in the past three months. The average Sun Life Financial price target of C$71.59 implies 16.4% upside potential.
Analyst price targets range from a low of C$65.90 per share to a high of C$78 per share.
Final Thoughts
Sun Life is a solid dividend stock that appears to be trading at a reasonable price. Indeed, analysts have a favorable view of the stock, as they see upside potential. In addition, the acquisition seems like it will create value for shareholders, as it will allow the company to expand its American operations while also being accretive to its EPS and ROE.
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