IGM Financial Inc.

Sound bite for Twitter and StockTwits is: Mutual Fund Company. The dividend yield is good and the price is cheap to reasonable but below the median. You may not get a better price. But the stock is cheap because mutual fund companies have not done well lately and there may be further legislation or regulations done by the government in the near future. See my spreadsheet on IGM Financial Inc.

I do not own this stock of IGM Financial Inc. (TSX-IGM, OTC-IGIFF) but I used to. 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 wanted to rationalize my portfolio. So I sold this stock and bought more of Power Financial. I purposely sold at a low point to reduce taxes and did a buy at a low also.

This company used to have moderate dividends and good increases. Dividends median was just over 3%. The dividend growth to 2008 was over the previous 5 and 10 years at 15.1% and 18.1% per year. However, like a lot of financial companies they have had problems since 2008 recession. Current the dividend is good and the dividend growth is low. The current dividend is 5.6% and the dividend growth is 1.4% and 3.9% per year over the past 5 and 10 years.

During the past 5 years the dividend was only increased twice, in 2012 and 2015 for 2.4% and 4.7%. There has been no increase so far this year and two dividends have already been paid. I would not expect any improvement anytime soon. However, analysts seem to feel that the company will raise their dividends over the next couple of years.

They can afford their dividends. The Dividend Payout Ratio for EPS for 2016 is 70.5% and the 5 year median is 71.9%. The DPR for CFPS for 2016 is 44.1% and the 5 year median DPR for CFPS is 43.6%. However, the DPR for CFPS I would prefer it to be 40% or lower. However, this ratio has always been in the 40% range.

Probably the thing to look at for growth is the Assets under Management (AUM). This has been growing lately but not strongly. The growth for the past 5 and 10 years is 3.6% and 1.7% per year. The AUM grew by 6.2% in 2016 and is expected to grow by 9% this year.

The 5 year low, median and high median Price/Earnings per Share Ratios are 12.40, 12.23 and 16.06. The corresponding 10 year values are 12.13, 14.52 and 16.66. The corresponding historical values are 11.49, 17.74 and 18.30. The current P/E Ratio is 12.39 based on a stock price of $40.01 and 2017 EPS estimate of 3.23. This stock price testing suggests that the stock price is reasonable and below the median.

I get a Graham Price of $37.50. The 10 year low, median and high median Price/Graham Price Ratios are 1.11, 1.26 and 1.47. The current P/GP Ratio is 1.07 based on a stock price of $40.01. This stock price testing suggests that the stock price is relatively cheap.

I get a 10 year median Price/Book Value per Share Ratio of 2.47. The current P/B Ratio is 2.07 a value some 16% lower. The current P/B Ratio is based on a Stock Price of $40.01 and BVPS of $19.35. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a historical median dividend yield is 3.37%. The current dividend yield is 5.62% based on dividends of $2.25 and a stock price of $40.01. The current dividend yield is some 67% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.

When I look at analysts' recommendations, I find Buy, Hold and Underperform recommendations. Most of the recommendations are a Hold and the consensus is a Hold. The 12 month stock price consensus is $43.22. This implies a total return of 13.65% with 8.02% from capital gains and 5.62% from dividends based on a stock price of $40.01.

Sarah Corning on Ozark Times talks about some interesting indicators on this stock. The Piotroski F-Score for this stock is 6 where 9 indicates a high value stock and 1 a low value stock. Stephanie Bedard-Chateauneuf on Motley Fool says she prefers CI (TSX-CIX., OTC-CIFAF) to this stock. Bank On Insight writer on Seeking Alpha is not keen on this stock either.

This is a 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 Inc.

The last stock I wrote about was about was Waste Connections Inc. (TSX-WCN, NYSE-WCN)... learn more. The next stock I will write about will be Intertape Polymer Group Inc. (TSX-ITP, OTC-ITPOF)... learn more on Friday, June 9, 2017 around 5 pm. Tomorrow on my other blog I will write about Something to Buy June 2017... learn more on Thursday, June 8, 2017 around 5 pm.

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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