CI Financial Corp

Sound bite for Twitter and StockTwits is: Dividend Growth Company. This company has been doing well lately and has done a good job of increasing its dividends. They have set their dividends to values that probably can maintain. See my spreadsheet at cix.htm.

I do not own this stock of CI Financial Corp (TSX-CIX, OTC-CIFAF). I started to follow this stock originally because it was a Mutual Fund company. People talked about it being easier to make money from buying a Mutual Fund company than buying Mutual Funds. In 2009, it lost its listing on my dividend lists because of a dividend cut. In June 2014, MPL communications called this stock a Buy and advised that they were adding it to their list of Key Stock for the Investment reporter.

When they became a Unit Trust in 2006, dividends were significantly increased, but these dividends proved to be unsustainable, so dividends where decreased in 2010. They changed back to a corporation in 2009 and since that time, they have been increasing their dividends since 2011. This company has been publicly traded on the Toronto Stock Exchange since June 1994.

The company has a very mixed record when it comes to dividend increases. Some years dividends were not increased and some years dividends were decreased. They would seem at present to be a dividend growth company. The dividends have increased by 12% and 21% per year over the past 4 and 10 years. Over the past 5 years, dividends have decreased by 16% per year because of the 74% decrease in dividends in 2010.

If you had held this stock for 5, 10, 15 or 20 years to the end of 2014, 29%, 95%, 374% and 1054% of your original stock cost would have been covered by dividends. Because dividends were quite high, especially from 2007 to 2009, what has happened in the past probably will not happen in the future.

However, current the dividend rate is good and so are the dividend increases. The current dividend yield is 3.89% and the 5 year median dividend yield is 3.72%. The most recent dividend increase was in 2015 and was for 4.8%. However, the total dividends to be paid in 2015 will be 9.75% higher than the total dividends paid in 2014. This is because dividends have been raised more than once during a calendar year.

If you had held this stock for 5, 10, 15 or 20 years to the end of 2014, you would be earning 7.1%, 8.5%, 31.6% and 88.4% on your original stock purchase price. Here again what happened in the past may not happen in the future, but the dividends are good on this stock and so are the current dividend increases.

The Dividend Payout Ratios are fine. The 2014 DPR for EPS is 63% and the DPR for CFPS is 49.1. The 5 year median values are 67.2% and 49.1% for EPS and CFPS, respectively. Both these ratios are expected to be around 60% in 2015.

The outstanding shares have decreased slightly (less than 1% per year) over the past 5 and 10 years. Assets under Management (AUM) growth have been moderate to good. Revenue and earnings growth has been good. Cash Flow growth has been moderate. You will notice that the actual Revenue growth is less than the growth for Revenue per Share. This is because of the slight decline in outstanding shares. In this case the Revenue growth is more important for shareholders than the Revenue per Share growth.

AUM growth over the past 5 and 10 has been at 9.9% and 7.6% per year. Analysts expect similar growth over the next two years. Assets under Administration have growth at 9.1% and 6.7% per year over the past 5 and 10 years.

Revenue has grown at 9% and 8.3% per year over the past 5 and 10 years. Revenue per Share has grown at 9.8% and 8.8% per year over the past 5 and 10 years. Analysts seem to expect Revenue growth of 10.7% for 2015. If you compare the 12 month growth in Revenue to the end of 2014 to the 12 month growth in Revenue to the end of the first quarter, the growth is only 3%.

Net Income has grown at 16.5% and 9% per year over the past 5 and 10 years. EPS has grown at 12.9% and 8.5% per year over the past 5 and 10 years. Net Income is expected to growth at 15% for 2015. If you compare the 12 month growth in Net Income to the end of 2014 to the 12 month growth in Net Income to the end of the first quarter, the growth is only 4.4%.

Cash Flow has grown at 6.3% and 6.3% per year over the past 5 and 10 years. Cash Flow per share has grown at 7% and 6.8% per year over the past 5 and 10 years. Analysts expect Cash Flow to decline in 2015. However, if you compare the 12 month growth in Cash Flow to the end of 2014 to the 12 month growth in Cash Flow to the end of the first quarter, there is some growth at 1.5%.

Return on Equity has always been good and it has been above 10% each year over the past 10 years. The ROE for 2014 is 27.5% and the 5 year median is 23.3%. The ROE on comprehensive income is very close at 27.6% with a 5 year median of 23.1%. This suggests that the earnings are of good quality.

The Liquidity Ratio for 2014 was 0.90. This means that the current assets cannot cover the current liabilities. If you had in cash flow after dividends, the ratio is 1.82%. This means that the company depends on cash flow to fund current liabilities. The Debt Ratio has always been quite good and the current one for 2014 is 2.72. The 5 year median 2.29.

Leverage and Debt/Equity Ratios are good ones, especially considering this is a financial service company. The ratios for 2014 are 1.58 and 0.58. The 5 year median values are also 1.58 and 0.58.

This is the first of two parts. The second part will be posted on Monday, June 29, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

CI Financial Corp. is a diversified wealth management firm and one of Canada's largest investment fund companies. CI is an Independent and Canadian-owned company. This company promotes and manages mutual funds and other investment products through its wholly-owned subsidiaries of CI Investments Inc., and Assante Wealth Management. Its web site is here CI 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.

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