Manulife Lifts Dividend 10%, Signals Confidence Amid Record Earnings

TORONTO, ON – February 11, 2026 – Manulife Financial Corporation has signaled strong confidence in its financial footing and future prospects, announcing a substantial 10.2% increase to its quarterly dividend for common shareholders. The move, revealed today, boosts the payout by 4.5 cents to $0.485 per share.

The increased dividend is scheduled for payment on or after March 19, 2026, to all shareholders of record at the close of business on February 25, 2026. This decision by the Board of Directors is not just a welcome development for income-focused investors but also serves as a powerful statement on the company's stability and profitability in a complex global market.

Underpinning the Payout: Record Earnings and Capital Strength

The dividend hike is anchored by a year of impressive financial performance in 2025. Manulife reported record core earnings of $7.5 billion for the full year, a 3% increase from 2024 on a constant exchange rate basis. The fourth quarter alone contributed $2.0 billion in core earnings, up 5% from the same period in the previous year. This robust performance was largely fueled by significant growth in the company's high-potential business segments, including its Asia operations and Global Wealth and Asset Management (WAM) division, which saw core earnings climb by 18% and 14% respectively.

While net income attributed to shareholders saw a slight dip in the fourth quarter to $1.5 billion, primarily due to unfavorable U.S. life insurance claims experience, the full-year picture remained positive with net income reaching $5.6 billion. More importantly for a move like this, the company's capital position is exceptionally strong. Manulife's Life Insurance Capital Adequacy Test (LICAT) ratio, a key measure of an insurer's ability to withstand financial shocks, stood at a formidable 136% at the end of 2025. This healthy capital buffer provides the foundation and flexibility for the board to confidently increase shareholder returns.

In 2025, the financial services giant demonstrated a firm commitment to its shareholders, returning a total of $5.4 billion through a combination of dividends and an aggressive share buyback program. The company purchased and cancelled 54.4 million of its common shares, representing 3.1% of shares outstanding, for a total of $2.4 billion.

A Pattern of Rewarding Shareholders

This latest 10.2% increase is not an isolated event but rather a continuation of a well-established trend of consistent dividend growth. Over the past decade, Manulife has maintained an average dividend per share growth rate of 10.5% annually. This consistency reinforces the company's reputation as a reliable dividend grower, a quality highly prized by long-term investors.

The dividend is well-covered by earnings, with a core earnings per share (EPS) of $4.21 for 2025, providing ample room for the increased payout. This disciplined approach to capital allocation allows the company to reward shareholders while simultaneously reinvesting in growth.

For investors participating in the company's Canadian and U.S. Dividend Reinvestment and Share Purchase Plans (DRIPs), the announcement carries additional weight. As per the release, Manulife will purchase common shares on the open market to fulfill these plans. This mechanism allows investors to automatically reinvest their dividends to acquire more shares, harnessing the power of compounding and deepening their investment in the company's long-term success without incurring discounts or fees on the purchase price.

Navigating the Market and Sector Landscape

The market's reaction to the news was measured, with Manulife's stock (trading as MFC on the TSX and NYSE) seeing a minor dip in after-hours trading following the earnings release. However, the broader sentiment from financial analysts remains overwhelmingly positive. The consensus rating for the stock is a "Buy," with eight analysts recently issuing an average 12-month price target of C$55.25, suggesting a potential upside from its current trading level.

Analysts are forecasting continued strength, with an average EPS forecast of $4.56 for 2026, which would represent a significant outperformance compared to the broader life insurance industry. This optimism is rooted in the company's strong new business growth, which saw metrics like new business value (NBV) jump 18% in 2025.

Compared to its peers among Canada's largest life insurers, Manulife's dividend hike keeps it competitive. The move is indicative of a wider trend within the Canadian financial sector, where the major players, often referred to as the "Big Four" life insurers, are expected to continue raising dividends and buying back shares throughout 2026. This reflects a sector-wide position of strength, characterized by strong capitalization and conservative balance sheets, even as the overall earnings environment becomes less supportive.

Economic Headwinds and Strategic Tailwinds

Manulife's confident posture comes against a backdrop of moderate economic growth forecast for Canada in 2026, with most economists predicting real GDP growth in the 1% to 1.6% range. The Bank of Canada is widely expected to maintain its policy rate at 2.25% for much of the year, creating a stable, if not stimulative, interest rate environment. For an insurer, this stability can be beneficial for managing its vast investment portfolios.

While the overall outlook for the Canadian life insurance sector is considered neutral, Manulife appears poised to outperform thanks to its strategic initiatives. The company has actively pursued growth beyond its established markets, a strategy highlighted by its 2025 expansion into India through a joint venture with Mahindra, key acquisitions like Comvest Credit Partners to bolster its asset management arm, and the opening of a new office in Dubai to cater to high-net-worth clients.

These strategic investments are designed to create new revenue streams and drive future profitability, providing the engine for sustained growth. The board's decision to increase the dividend so substantially is a clear endorsement of this strategy, reflecting a belief that these initiatives will deliver significant value, allowing the company to continue rewarding its shareholders while navigating the evolving global economic landscape.