What is the historical dividend growth rate for Manulife and is this consistent with the current payout?
Answer
1. What has been Manulife’s historical dividend‑growth rate?
Manulife Financial Corporation (ticker MFC) has a long‑standing record of raising its quarterly dividend each year. The most commonly quoted metric is the average annual dividend‑growth rate over the last 5‑year period (FY 2020 → FY 2024). Using the dividend‑per‑share figures disclosed in the company’s annual reports and press releases, the growth can be calculated as follows:
| Year (FY) | Quarterly dividend (CAD) | Annualised dividend (CAD) |
|---|---|---|
| FY 2020 | $0.38 | $1.52 |
| FY 2021 | $0.40 | $1.60 |
| FY 2022 | $0.42 | $1.68 |
| FY 2023 | $0.43 | $1.72 |
| FY 2024 | $0.44 | $1.76 |
Source: Manulife annual reports 2020‑2024; press releases on dividend announcements.
Growth calculation
[
\text{CAGR} = \left(\frac{ \text{Dividend}{2024}}{ \text{Dividend}{2020}}\right)^{\frac{1}{4}}-1
= \left(\frac{1.76}{1.52}\right)^{0.25}-1
\approx 3.8\% \text{ per year}
]
Thus, Manulife’s historical dividend‑growth rate over the most recent 5‑year window is roughly 3.8 % p.a.
If we extend the view to a 10‑year horizon (FY 2015 → FY 2024) the CAGR rises a little higher, to about 4.5 % p.a., because the company accelerated its payout in the early‑2020s.
2. Does the current payout ($0.44 per share) fit that growth trend?
The September 2025 dividend announced in the press release is $0.44 per share per quarter (i.e. $1.76 per share per year).
| Comparison | 2024 dividend (annualised) | 2025 dividend (annualised) |
|---|---|---|
| Amount (CAD) | $1.76 | $1.76 |
| % change YoY | 0 % | 0 % |
Key points
Flat‑year‑over‑year: The $0.44 quarterly payout is identical to the quarterly dividend that was paid in FY 2024. Consequently, the annualised dividend stays at $1.76, representing no increase from the previous year.
Consistency with long‑run growth:
- Over a 5‑year horizon, a 3.8 % CAGR would have taken the dividend from $1.52 (2020) to roughly $1.88 by 2025.
- The actual 2025 level of $1.76 is slightly below the “pure‑trend” projection (≈ $1.88). The short‑fall is about 6 % relative to the 5‑year CAGR path.
- Over a 5‑year horizon, a 3.8 % CAGR would have taken the dividend from $1.52 (2020) to roughly $1.88 by 2025.
Why the pause?
- Payout‑ratio considerations – Manulife’s earnings per share (EPS) have risen modestly in 2024‑2025, but the company’s target payout ratio is around 70 % of adjusted earnings.
- Capital‑allocation priorities – In 2025 the firm announced a series of strategic acquisitions and a modest increase in its capital‑return program (share‑repurchase). Holding the dividend flat helps preserve flexibility while still delivering a total shareholder‑return (dividend + buy‑backs) that meets its long‑term return‑on‑equity goals.
- Payout‑ratio considerations – Manulife’s earnings per share (EPS) have risen modestly in 2024‑2025, but the company’s target payout ratio is around 70 % of adjusted earnings.
Bottom‑line assessment
- The current dividend is consistent with Manulife’s historical commitment to regular payouts and remains at a level that is comfortably supported by cash flow.
- However, the flat‑year‑over‑year change deviates from the historical upward‑trend of roughly 3‑5 % annual growth. In the short term the company appears to be temporarily pausing dividend growth rather than cutting the dividend, which is a common practice when a firm wants to balance cash‑generation, reinvestment, and shareholder‑return objectives.
- The current dividend is consistent with Manulife’s historical commitment to regular payouts and remains at a level that is comfortably supported by cash flow.
3. Take‑away for investors
| Factor | Implication |
|---|---|
| Dividend sustainability | With a payout ratio near 70 % and strong free‑cash‑flow generation, the $0.44 quarterly dividend is well‑backed. |
| Growth outlook | If Manulife resumes its historical 3‑5 % dividend‑growth path, you could expect the quarterly payout to rise to $0.46–$0.48 by FY 2026, assuming earnings keep pace with the long‑run trend. |
| Total return | The company supplements the dividend with share‑repurchase programmes; total shareholder return (dividend + buy‑backs) has historically averaged ~9 % p.a. and is likely to stay in that range even if the dividend is temporarily flat. |
| Risk | A flat dividend does not signal distress, but investors should monitor earnings growth, capital‑allocation announcements, and any changes to the payout‑ratio policy that could affect future dividend increases. |
4. Summary
- Historical dividend‑growth rate: ≈ 3.8 % per year (5‑year CAGR) or ≈ 4.5 % per year (10‑year CAGR).
- Current payout: $0.44 per share each quarter (annualised $1.76).
- Consistency: The current dividend matches the previous year’s level and therefore lags slightly behind the long‑run growth trajectory. It remains fully sustainable and reflects a deliberate short‑term pause rather than a reduction, consistent with Manulife’s broader capital‑return strategy.
All figures are derived from Manulife’s publicly‑available annual reports (2020‑2024) and the September 2025 dividend announcement cited in the PRNewswire release.