Sound bite for Twitter and StockTwits is: Price is relatively reasonable to expensive. The price seems to be above the historical median, but this company has not been around for long, just since 2004. A P/E of 14.01 is not very high. However, I do not think this stock is cheap by any means or ratio. See my spreadsheet at ifc.htm.
I do not own this stock of Intact Financial Corp. (TSX-IFC, OTC- IFCZF). In November 2011, the TD Bank put out a special report on the merits of dividend investing. At the end of the report they listed a number of Canadian stocks as Equity Yield ideas. This was one stock listed that I did not follow.
Also in a column by John Heinzl dated December 2013 he gave five dividend growth stocks to buy and hold. He liked the following stocks: Bank of Nova Scotia (BNS); TransCanada (TRP); Intact Financial (IFC); Saputo (SAP); and Canadian Natural Resources (CNQ) He said these stocks had blue chip value of a solid balance sheet; an attractive valuation; a leadership position in the industry; above-average profitability; and long-term earnings and dividend growth.
There is some insider ownership. The CEO has shares worth around $14.2M. An officer has shares worth around $7.3M and the Chairman has shares worth around $2.6M. Of course all of this adds up to less than 1% of the outstanding shares for this company worth around $11.7B.
The 5 year low, median and high median Price/Earnings per Share Ratios are 11.93, 13.42 and 14.90. The corresponding 10 year ratios are similar at 11.69, 13.19 and 14.69. The current P/E Ratio is 14.01 based on a stock price of $89.37 and 2015 EPS estimate of $6.38. The price is above the relative median. However, this stock price testing suggests that the stock price is relatively reasonable.
I get a Graham Price of $74.78. The 10 year low, median and high median Price/Graham Price Ratios are 0.95, 1.06 and 1.15. The current P/GP Ratio is 1.20 based on a stock price of $89.37. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year Price/Book Value per Share Ratio of 1.81. The current P/B Ratio is 2.29 based on a stock price of $89.37 and BVPS of $38.95. The current P/B Ratio is some 27% above the 10 year P/B Ratio. However, this stock price testing suggests that the stock price is relatively expensive.
The 5 year median dividend yield is 2.77% and the current dividend yield at 2.37 is some 14.5% lower. The current dividend yield is based on dividends of $2.12 and a stock price of $39.37. The price is above the relative median. However, this stock price testing suggests that the stock price is relatively reasonable.
The historical median dividend yield is 2.75% and the historical close dividend yield is 2.53%. These dividend yields are 13.7% and 6.34% above the current dividend yield of 2.37%. The price is above the relative median. However, this stock price testing suggests that the stock price is relatively reasonable.
The analysts' recommendations are Strong Buy, Buy and Hold. The consensus recommendations would be a Buy. The 12 month consensus stock price is $94.10. This implies a total return of 7.66% with 2.37% from dividends and 5.29% from capital gains.
In June 2015 at a price of $85.90 Forbes says that this stock is oversold. (It is a good time to buy a stock when it is oversold.) Doug Watt of Motley Fool in July 2015 says this stock is the perfect buy and hold stock for long-term investors. In this article in the Canadian Underwriter, Intact Financial Corporation announced its acquisition of Canadian Direct Insurance Inc.
This is the second of two parts. The first part was posted on Thursday, July 09, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.
Intact Financial Corporation is the largest provider of property and casualty insurance in Canada. Intact offers home, auto and business insurance through Intact Insurance, Novex Group Insurance, Belair Direct, GP Car and Home and BrokerLink. Its web site is here Husky.
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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