I do not own this stock of Industrial Alliance Ins. & Fin. Srv. Inc. (TSX-IAG, OTC-IDLLF). This was a stock shown as a dividend growth stock on the Canadian All Star List. See this list here.
Dividends yields are moderate with low to moderate dividend growth. The 5, 10 and historical median dividend yield 2.60%, 2.80% and 2.38%. The moderate dividend growth happened in the past and has not been recent. See the table below. The last dividend increase occurred in 2017 and was for 8.6%. It did have dividends flat for a time after the last recession. All insurance companies had problems following the last recession because of very low interest rates.
The Dividend Payout Ratio for 2017 for EPS was 30% with 5 year coverage at 28%. The DPR for CFPS for 2017 was 97% with 5 year coverage at 26%. It is often the 5 year coverage that is the important one because any company can have a low coverage in a year.
The Total Return is show below for years of 5 to 17. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.
Generally shareholders have done well with this stock. The total return over the past 10 years is low because the stock price hit a high 10 years ago. This does point to the importance of ensuring you are paying at least a reasonable price for a good stock. However, most pricing problems did not show up until the following year.
Also all life insurance companies had a hard time after the last recession because of very low interest rates. They will do better now that interest rates are rising.
| Years | Div Gth | Tot Ret | Cap Gain | Div |
|---|---|---|---|---|
| 5 | 7.85% | 16.66% | 13.77% | 2.88% |
| 10 | 6.53% | 5.61% | 3.46% | 2.15% |
| 15 | 10.50% | 10.20% | 7.67% | 2.53% |
| 16-17 | 10.25% | 8.76% | 6.55% | 2.21% |
The 5 year low, median and high median Price/Earnings per Share Ratios are 10.21, 11.37 and 12.68. The corresponding 10 year ratios are 10.10, 11.37 and 12.62. The corresponding historical ratios are 10.55, 11.81 and 13.67. The current P/E Ratio is 9.83 based on a stock price of $52.98 and 2018 EPS estimate of $5.39. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $77.76. The 10 year low, median and high median Price/Graham Price ratios are 0.67, 0.73 and 0.83. The current P/GP Ratio is 0.68 based on a stock price of $52.98. This stock price testing suggests that the stock price is reasonable and below the median.
I get a 10 year median Price/Book Value per Share of 1.12. The current P/B Ratio is 1.06 based on Book Value of $5,463M, Book Value per Share of $49.86 and a stock price of $52.98. Note that any P/B Ratio below 1.50 is considered to be a low ratio. The current ratio is some 5% below the 10 year median ratio. This stock price testing suggests that the stock price is reasonable and below the median.
I get an historical median dividend yield of 2.38%. The current dividend yield is 2.87% based on dividends of $1.52 and a stock price of $52.98. The current yield is some 21% above the historical dividend yield. This stock price testing suggests that the stock price is relatively cheap.
The 10 year median Price/Sales (Revenue) Ratio is 0.53. The current P/S Ratio is 0.52 based on 2018 Revenue estimate of $11,256M, Revenue per Share of $94.56 and a stock price of $52.98. The current ratio is 2% below the 10 year median ratio. This stock price testing suggests that the stock price is reasonable and below the median.
When I look at analysts’ recommendations I find Buy (3) and Hold (5) recommendations. The consensus recommendation would be a Hold. The 12 month stock price is $63.63. This implies a total return of 22.97% with 20.10% from capital gains and 2.87% from dividends. This is based on a current stock price of $52.98.
Felix Olson on Simply Wall Street thinks this stock is a good dividend payer. Scott Perkins on Simply Wall Street thinks that this stock is priced below its intrinsic value. Mik Veccio on Alba Journal says the Williams Percent Range is -55.77 on this stock and that means that it is neither overbought or oversold. Ryan Goldsman on Motley Fool thinks that there is a lot of upside to this stock. See what analysts are saying about this stock on Stock Chase. They like this company.
Industrial Alliance Insurance and Financial Services Inc. is a life and health insurance company. It offers life and health insurance products, savings and retirement plans, mutual funds, securities, auto and home insurance, mortgages, and others. . Its web site is here Industrial Alliance Ins. & Fin. Srv. Inc.
The last stock I wrote about was about was Ritchie Bros Auctioneers Inc. (TSX-RBA, NYSE-RBA)... learn more. The next stock I will write about will be Hardwoods Distribution Inc. (TSX-HDI, OTC-HDIUF)... learn more on Friday, May 25, 2018 around 5 pm. Tomorrow on my other blog I will write about Defined Contribution Pensions.... learn more on Thursday, May 24, 2018 around 5 pm.
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