Wednesday, August 27, 2008

IGM Financial 2

As I said yesterday, I invested in the company (TSX-IGM) in October 2006 and I have made 0% return. A very good reason to continue holding this stock is because the dividends have been raised, ever though there is a financial crisis. It shows that management has confidence in the future.

No one expects that this stock will earn for 2008 the same Earnings per Share (EPS) that it earned in 2007. It is not going to be coming down much and it is expected the EPS will rise for 2008. As I said yesterday, the April dividend was raised and the company has announced that the dividends will again be raised, on schedule, for October. This means that the dividends will go up some 15.5% this year. This is a dividend paying stock and dividends will affect the stock price.

There is a number of buy calls out on this stock and some of holds. I think people are afraid of financial stocks, but this could be a great time to buy. For the stock, the dividend yield at 4.9% is higher than the 5 year average of 3.2%. The P/E at 12.9% is lower than the 5 year average of 16.3%.

This stock has a strong balance sheet with the Asset/Liability ratio at 2.17. You would want to ratio to be 1.5 or higher. The Asset/Book Value leverage is good 1.87. The only negative I see is the accrual ratio is high at 5.7%. However, on any stock you look at there will be some negatives. What you need to look at is the whole stock. Is it, by and large, showing mostly good solid positives.

This is a premier mutual fund, managed asset and personal financial services company. The company has three operating units, Investors Group, Mackenzie Financial Corporation and Investment Planning Counsel Inc. This company is part of Power Financial group. Its web site is http://www.igmfinancial.com/english/. See my spreadsheets on this company at www.spbrunner.com/stocks/igm.htm. I have reloaded my spreadsheet with the new figures for the second quarterly report for June 2008.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. . See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on web site.

No comments:

Post a Comment