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. This link to this report is here.
When I was updating my spreadsheet, I noticed that there seems to be a lot of insider selling at 0.08%. The stock really took it on the chin in 2018, but it has recovered somewhat and is up by almost 20% this year. It would seem in the plan of arrangement dated January 1, 2019; the company name has changed to iA Financial Corp except most sites are still show the name as Industrial Alliance Ins. & Fin. Srv. Inc and do not recognize iA Financial.
The dividends are in the moderate range. The current dividend yield is 3.18%, with 5, 10 and historical yields at 2.69%, 2.80% and 2.41%. Dividend increases have varied over time. Very low interest rates were bad for insurance companies. The last dividend increase was in 2018 and it was for 9.2%. The company paid 11.2% more dividends in 2018 than in 2017. See chart below for dividend growth over the past 18 years.
The Dividend Payout Ratios are fine. The DPR for EPS is good at 28.4% for 2018. The 5 year coverage is also good at 28.1%. The DPR for CFPS for 2018 is very good at 9.69% with 5 year coverage higher at 33%.
Debt Ratios are fine. Because this is an insurance company, you want to look at how assets cover their long term liabilities. The Ratio for this company is 0.79 so this is good. The Liquidity Ratio is not important for financials. The Debt Ratio is good for an insurance company at 1.10.
The Total Return per year is shown below for years of 5 to 18 to the end of 2018. 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.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2013 | 5 | 10.16% | 1.36% | -1.48% | 2.84% |
| 2008 | 10 | 5.40% | 10.11% | 6.45% | 3.66% |
| 2003 | 15 | 10.62% | 7.74% | 4.69% | 3.05% |
| 2000 | 18 | 10.31% | 7.01% | 4.33% | 2.68% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 10.21, 11.37 and 12.34. The corresponding 10 year ratios are 9.39, 11.31 and 12.53. The historical ratios are 10.39, 11.64 and 13.41. The current P/E Ratio is 8.68 based on a stock price of $52.15 and 2019 EPS Estimate of $6.01. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $85.20. The 10 year low, median, and high median Price/Graham Price Ratios are 0.62, 0.75 and 0.82. The current P/GP Ratio is 0.61 based on a stock price of $52.15. 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 1.09. The current P/B Ratio is 0.97 based on Book Value of $5,741M, Book Value per Share of $53.68 and a stock price of $52.15. The current ratio is 11% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get an historical median dividend yield of 2.41%. The current dividend yield is 3.18% based on dividends of $1.66 and a stock price of $52.15. The current dividend yield is 32% 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 0.45 based on last 12 month Revenue, Revenue per Share of $114.70 and a stock price of $52.15. The current P/S Ratio is 14% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
Results of stock price testing is cheap to reasonable. I see no problems with any of the tests.
When I look at analysts’ recommendations, I find Strong Buy (1), Buy (6) and Hold (2). The consensus would be a Buy. The 12 month stock price consensus is $60.78. This implies a total return of 19.73% with 16.55% from capital gains and 3.18% from dividends.
See what analysts think on Stock Chase. They think it is a safe uninteresting bet. Joey Frenette on Motley Fool likes this stock. A Writer on Simply Wall Street looks at this company’s ROE. Marion Hillson on The Enterprise Leader talks about some recent analyst’s reports.
IA Financial Corp, formerly 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 31, 2019 around 5 pm. Tomorrow on my other blog I will write about Women and Investing.... learn more on Thursday, May 30, 2019 around 5 pm.
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