IGM Financial Inc 2

I bought this stock (TSX-IGM) in 2006 and my total return to date is 5.4%. My dividend portion is probably around 4.4% and the rest is capital gain. This is a mutual fund company and mutual fund companies have not done well lately. The total return over the last 5 and 10 years for this company is around 4% and 10% per year. The dividend portion is probably around 4.5%.

When I look at Insider Trading, I find net Insider Selling of $3.4M. There is a minimal amount insider buying. As far as I can see, all insider but directors have lots more stock options than shares. There are lots of insider who are not executives or officers of the company that have stock options. IGM is also buying back stocks on the open market for cancellation. Over the past few years, the number of shares outstanding has gone down, but only by less than 1% per year.

I get a 5 year median low Price/Earnings Ratio of 13.3 and a 5 year high P/E Ratio of 17.4. The current P/E ratio of 15.4 is pretty close to an average. I get a Graham Price of $34.63 and a current stock price of $49.18. The stock price is some 42% higher than the Graham Price. This is pretty average for this company. This is a growth company, and these companies seldom have a stock price at the Graham Price.

I get a 10 year median Price/Book Value Ratio of 2.97 and a current P/B Ratio of 2.95. The current ratio is 99% of the 10 year median. When I look at the yield, I get a current one of 4.2% and a 5 year median at 5%. So by this measure, the price is higher than average, but there has been no dividend increase since 2009. By most of these measures, except yield, shows an rather average price.

When I look at analysts’ recommendations, I see Strong Buy, Buy, Underperform and Sell. There are at least 2 sells, but only 1 Underperform recommendation. There are more Strong Buy recommendations than any other recommendation. The consensus is a Buy. (See my site for information on analyst ratings.)

It is interesting that I find no Hold recommendations. One analyst’s said the stock was attractively priced. The 12 month stock price is at just $50.75 for those analysts that rate this stock a buy. (That would be a 12 month total return of just over 7 %.) Another buy recommendation comes with a 12 month price of $53.00. This will give a total return close to 12%.

One analyst with a sell recommendation says that it is a sell because there is not much growth in this stock at present. A number of analysts remark that it is a very solid company. Do not forget that analysts give rating depending on their views of why you should or should not buy a company. As far as I can see, the price on this stock is relatively an average price. It is not a great price.

As I said yesterday, I will retain the shares I have but I will not be buying more as I also have an investment in Power Financial.

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. IGM Financial Inc. is a member of the Power Financial Corporation group of companies. Its web site is here IGM. See my spreadsheet at igm.htm.

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 for stocks followed and investment notes. Follow me on twitter.