Sun Life Financial (TSX: SLF) has fallen by more than 10% since the end of June. Investors who have missed the big rally in the share in the past year wonder if SLF is now sold over and is good to buy for a self -driven tax -free savings account (TFSA) or registered pension saving plan (RRSP) portfolio aimed at dividends and total returns.
Sun Life Share Price
Sun Life acts almost $ 80 per share at the time of writing compared to $ 90 at the end of the second quarter. The share was as low in recent days as $ 78 after investors had responded negatively to the win results of Q2 2025 and the company’s prospects for the rest of the year.
Sun Life reduced his guidance for his dental insurance activities in the United States because of uncertainty about future Medicaid financing for dental coverage. This led to a decrease of 8% in the share price.
The total Q2 figures were actually stable compared to the same period last year. The underlying net income came to $ 1.02 billion, an increase of 2% on an annual basis. The underlying return on equity (roe) remained with 17.6%.
Asset management and wealth activities yielded comparable results compared to Q2 2024, with underlying net income of $ 455 million. The total control assets (AUM) rose from $ 1.47 trillion to $ 1.54 billion.
With regard to the insurance side, group health and protection, which offers insurance products and services to business and government customers with employee benefits, has increased the underlying net income by 7%. However, individual protection that underlies the net income decreased 10%.
For each region, the Asia activities supplied the majority of the good news with a record that pops up underlying net income in business units by 15% to $ 206 million. In Canada, the underlying net income fell by 6% to $ 379 million. To the south of the border, the American underlying net income fell by 4% to US $ 143 million.
Market forecasts
Sun Life and other wealth and insurance companies have benefited from the jump in interest rates in Canada and the United States that took place in 2022 and 2023. Insurance companies must keep large quantities of money fluids to cover potential claims. Rising interest rates from the government have increased the return that the insurance companies can generate on these funds when invested in investments with fixed -income income.
The central banks began to lower interest rates in the second half of 2024. Extra tariff reductions have been on hold, but analysts expect a weakening economy to force the central banks to reduce the rates before the end of the year. This would put pressure on the returns that insurance companies can generate at cash positions.
On the asset management side, rising stock market valuations have contributed to stimulating higher profit and increasing AUM for insurance companies that manage funds for institutional, business and individual customers. The rally can continue, but a withdrawal is probably because the valuations are stretched compared to historical standards and economic uncertainty builds the rates lead to higher consumer prices.
As such, profit growth at Zonnestaan and his colleagues can be more challenging in the medium term.
Possibility
Asia remains a bright spot for the company as the wealth from the middle class expands in the region in its massive population base. At the same time, Sun Life and the wider insurance sector will consider considerably by using AI programs to automate processes to improve efficiency, reduce costs and identify the potential for the sale of new products based on the analysis of customer data.
Time to buy?
Extra disadvantage can be on the way, so I wouldn’t support the truck yet. A better access point can come to the fore in the coming months.
That said, the Sun Life deserves to be on your radar for a buy-and-hold portfolio. The current dividend yield of 4.4% pays existing investors well to run some turbulence. Further weakness in the share price would be a chance to add to the position.
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