Manulife Dividend Cut and Links

by Mike Holman

Manulife Financial cut its dividend by a whopping 50%.  They still made $1.8 billion in Q2 so if anything it’s probably a good buy since the stock dipped 15% today.   The company hasn’t done a good job managing the risk of its variable-annuity products over the last few years so this move was made to improve the balance sheet and lower risk.

This just goes to show that diversification is a key strategy in investing.  It also shows that stock picking is hard – it doesn’t matter how well a company is doing or how long it has been doing it – you just don’t know what is really going on inside.  Some good financial statement analysis can go a long way.

Some links

Million Dollar Journey talks about the purpose behind your financial goals.

Canadian Capitalist had a neat post on the merits of investing in collectibles such as rare stamps and coins.

Where Does All My Money Go found the impossible – free investment management.

Bible Money Matters goes through his experience with signing up for Lending Club peer to peer lending.

Cash Money Life has some unexpected ways a baby can change your budget.  Patrick should know since he just had a baby.

Moolanomy explains how to find the best online high yield bank accounts.  (American)

Military Finance Network goes over Dave Ramsey’s Baby Steps.


Economy and Your Finances Carnival

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Carnival of 20 Something Finances

Carnival of Financial Planning

Money Hacks Carnival

Festival of Frugality

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{ 7 comments… read them below or add one }

1 Canadian Capitalist

Thanks for the mention Mike. I don’t own Manulife directly but it is a shocker nonetheless. Could any of the banks do the unthinkable and cut the dividend now that Manulife has set a precedent?

2 Mike

I don’t own MFC either although I did consider it at times.

I don’t know if the banks will cut – you would think they would have done it last year if they were ever going to.

3 Million Dollar Journey

Thanks for the link Mike. I own MFC and was very surprised at the dividend cut. I hope it doesn’t give the other big dividend payers any ideas!


Thanks for the link – they’ve been raising capital like mad (MFC).

5 MoneyEnergy

I own some MFC common stock. Very surprised at the cut, especially coming so late – I thought all the recession-cutting of divs was over with. Just shows you not to depend 100% even on direct dividend income – best to manage your cashflows with a good weighting in more stable interest-paying vehicles like money markets. Or buy way less volatile stocks, like SC (which barely gave a budge during the whole financial debacle!).

6 Jess

I own a bit of Manulife. I’m not concern. I’m pretty diversified not only in paper trading but in businesses and hard assets as well. Like your blog and I’m always reading it. Don’t want to be left behind for new ideas! =)

7 Dividend Growth Investor

This goes on to show you that you have to be diversified, not own just financials and reits because the current yields look tempting on paper. People which fail to learn from their mistakes are doomed to repeat them over and over..

PS I was viewing MFC as a potential buy candidate for my portfolio, but won’t do it now..

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