Sun Life Earnings: Decent Quarter as the Firm Transitions to IFRS 17

No-moat-rated Sun Life Financial reported a decent set of numbers to start the year and transitioned to IFRS 17 financial reporting standard. The company reported underlying net income of CAD 895 million or CAD 1.52 per share in the first quarter versus CAD 720 million or CAD 1.23 per share in the first quarter of the previous year. The first-quarter results equated to an annualized underlying return on equity of 17.3%. The company paid a quarterly dividend of CAD 0.72 per share in the first quarter of 2023, which represents a 4.4% dividend yield as per the current stock price. We note that the dividend payout has been 45%-55% of underlying earnings over the past year, highlighting the safety of the dividend. We are maintaining our CAD 63 fair value estimate for Sun Life after incorporating the first-quarter results.