NEW YORK ( TheStreet) -- Manulife Financial Corporation (NYSE: MFC) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.
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- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Insurance industry. The net income has significantly decreased by 161.2% when compared to the same quarter one year ago, falling from $490.00 million to -$300.00 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Insurance industry and the overall market on the basis of return on equity, MANULIFE FINANCIAL CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
- The gross profit margin for MANULIFE FINANCIAL CORP is currently extremely low, coming in at 8.60%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.70% is significantly below that of the industry average.
- The share price of MANULIFE FINANCIAL CORP has not done very well: it is down 18.34% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- MANULIFE FINANCIAL CORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, MANULIFE FINANCIAL CORP turned its bottom line around by earning $0.01 versus -$0.27 in the prior year.
-- Written by a member of TheStreet Ratings Staff