Tuesday, June 17, 2014

IGM Financial Inc.

I do not own this stock of IGM Financial Inc. (TSX-IGM, OTC-IGIFF). I am following this stock because I used to own this stock. I originally bought this stock to replace AGF Management (TSX-AGF.B). IGM was known as a dividend growth stock and it was on a lot of lists of good stocks, including Mike Higgs' and Dividend Aristocrats. I sold this 2011 because I had Power Financial, of which this company is partially owned by, and I want to rationalize my portfolio.

As with a lot of insurance and mutual fund companies, this company had problems with 2008. Prior to 2008 dividend increases were around 18% per year. Since 2008 the median increase is around 2.4% per year. The current 5 and 10 year growth in dividends is at 1.5% and 8.1% per year. Also, there was no dividend increase in 2010 and 2013. So far there has been no increase in dividends for 2014.

The 5 year median Dividend Payout Ratio for EPS is at 72% and 66% for CFPS. Prior to 2008 the DPR for EPS was closer to 45% and for CFPS closer to 43%. The DPR for 2013 was 71% for EPS and 66% for CFPS. For 2014 analysts' expect the DPR for both EPS and CFPS to be around 64%.

The total return to date over the past 5 and 10 years is at 8.67% and 7.96% per year. The portion of this return attributable to dividends was at 4.63% and 4.46% per year. The portion of this return attributable to capital gain was at 4.04% and 3.50% per year.

The outstanding shares have not changed over the past 5 and 10 years. Shares have increased due to Stock Options and shares have decreased due to Buy Backs. On Revenue, Earnings and Cash Flow growth, the company has done much better over the past 10 years than over the past 5 years. Growth had restarted in 2010 however, 2012 was not a good year and had negative growth.

Revenue per Share has increased by 1% and 4.7% per year over the past 5 and 10 years using the 5 year running averages. EPS has increased by 0.9% and 6.5% per year over the past 5 and 10 years using the 5 year running averages. CFPS has grown by 2.5% and 6.6% per year over the past 5 and 10 years using the 5 year running averages.

Return on Equity has always been good and it has been higher than 10% over the past 10 years. The ROE for 2013 was at 16.4% and the 5 year median is also 16.4%. The ROE on comprehensive income is a bit better coming in at 17.4% for 2013 and a 5 year median of 16.2%.

The debt ratios have been generally good, with the 2013 Liquidity Ratio at 2.11 and the 2013 Debt Ratio at 1.58. The Leverage and Debt/Equity Ratios are fine at 2.74 and 1.74.

I will continue to follow this stock because it is a Dividend Growth Stock. See my spreadsheet at igm.htm.

This is the first of two parts. The second part will be posted on Wednesday, June 18, 2014 and will be available here. The first part talks about the stock and the second part talks about the stock price.

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 Financial.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

No comments:

Post a Comment