I do not own this stock of Intact Financial Corp (TSX-IFC, OTC-IFCZF). I am following this stock because 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.
The spreadsheet shows this stock growing nicely and providing a good return to the shareholders. This is a 200 year old company but most recently it was owned by the ING Group and they made it independent and listed it on the stock market in 2009. Also note that there is a big difference between General and Life Insurance companies. This is a General Insurance company.
The dividend yield is moderate as it’s the dividend growth. The current, 5 year, 10 year and historical dividend yields are 3%, 2.56%, 2.71% and 2.65%. The dividend growth over the past 5, 10 and 12 years is at 9.86%, 9.01% and 12.10% per year.
The Dividend Payout Ratio for earnings is good at 44.5% in 2017 with 5 year coverage at 44.9%. The DPR for CFPS is higher in 2017 that I like at 53.7%. However, the 5 year median DPR is good at 35.3% and it is the longer term value that counts the most.
Long Term Debt has been rising lately, but the Debt/Market Cap Ratio is just 0.15 which is a low value. I calculate the Liquidity Ratio to be 1.57 in 2017 with 5 year median at 1.94. Note everyone calculates a Liquidity Ratio for financial firms. The Debt Ratio is 1.36 which is a bit low for still fine for a financial firm.
The Total Return per year is show below for years of 5 to 13. 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.
Since this company went public on the TSX in 2009, it has provided a nice return for its shareholders. Note that General Insurance companies tend to be volatile which Life Insurances companies do not.
| Years | Div. Gth. | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|
| 5 | 9.86% | 12.84% | 10.14% | 2.69% |
| 10 | 9.01% | 13.04% | 10.24% | 2.80% |
| 13 | 12.10% | 13.11% | 10.31% | 2.80% |
The 5 year low, median and high median Price/Earnings per Share Ratios are 16.00, 17.43 and 18.87. The corresponding 10 year ratios are 15.96, 17.31 and 18.66. The historical ratios are 12.41, 13.68 and 14.95. The current P/E Ratio is 17.36 based on a stock price of $93.25 and 2018 EPS estimate of $5.37. This stock price testing suggests that the stock price is relatively reasonable and around the median.
I get a Graham Price of $75.61. The 10 year low, median and high median Price/Graham Price Ratios are 1.11, 1.29 and 1.39. The current P/GP Ratio is 1.23 based on a stock price of $93.25. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10 year median Price/Book Value per Share of 1.85. The current P/B Ratio is 1.97 based on Book Value of $6,587M, Book Value per Share of $47.32 and a stock price of $93.25. The current P/B Ratio is some 6.6% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get an historical median dividend yield of 2.65%. The current dividend yield is 3.00% based on dividends of $2.80 and a stock price of $93.25. The current dividend yield is some 13.3% above the historical one. This stock price testing suggests that the stock price is relatively reasonable and below the median.
The 10 year median Price/Sales (Revenue) Ratio is 1.45. The current P/S Ratio is 1.33 based on 2018 Revenue estimate of $9,733M, Revenue per Share of $69.32 and a stock price of $93.25. The current ratio is some 7.8% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
When I look at analysts’ recommendations I find Strong Buy (2), Buy (8), Hold (5) and Underperform (1). The consensus would be a Buy. The 12 month stock price is $109.57. This implies a total return of 20.50% with 17.50% from capital gain and 3.00% from dividends.
Erna Eldridge on Simply Wall Street and gives it an intrinsic value of $93.83 in June of 2018. The president of this company on Canadian Underwriter talks about User Based Insurance. Kay Ng of Motley Fool thinks this stock is suitable for conservative investors.. See what analysts are saying about this stock on Stock Chase. A number of analysts like this stock.
Intact Financial Corp is a property and casualty insurance company operating in British Columbia, Alberta, Ontario, Quebec and Nova Scotia. It distributes insurance under the Intact Insurance brand through a network of brokers. Its web site is here Intact Financial Corp.
The last stock I wrote about was about was AGT Food and Ingredients Inc. (TSX-AGT, OTC-AGXXF)... learn more. The next stock I will write about will be Premium Brands Holdings Corp (TSX-PBH, OTC-PRBZF) ... learn more on Wednesday, July 4, 2018 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks July 2018.... learn more on Tuesday, July 3, 2018 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.
See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
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