Is it a good company at a reasonable price? The stock price is just slightly lower than its all time high. This stock has done well for shareholders. It provides a low dividend but the increases are moderate in the 9% range per year. However, it is testing as expensive. So, now may not be the time to buy this stock. However, if you have it, I would not sell either.
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. This and Wajax are from TD Report on dividend investing.
When I was updating my spreadsheet, I noticed this stock as a general insurance company is a bit volatile, but it has done well for its shareholders.
If you had invested in this company in December 2014, for $1,006.20 you would have bought 12 shares at $82.85 per share. In December 2024, after 10 years you would have received $393.60 in dividends. The stock would be worth $3,140.76. Your total return would have been $3,534.36. This would be a total return of 14.34% per year with 12.06% from capital gain and 2.28% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $83.85 | $1,006.20 | 12 | 10 | $393.60 | $3,140.76 | $3,534.36 |
The current dividend yield is low with dividend growth moderate. The current dividend yield is low (below 2%) at 1.90%. The 5, 10 and historical median dividend yields are moderate (2% to 4% ranges) at 2.17%, 2.44% and 2.56%. The dividend increases are moderate (8% to 14% per year) at 9.75% for the last 5 years. The last dividend increase was in 2025 and it was for 9.92%.
The Dividend Payout Ratios (DPR) are good. The DPR for 2024 for Earnings per Share (EPS) is good at 39% with 5 year coverage at 38%. The DPR for 2024 for Adjusted Earnings per Share (AEPS) is good at 33% with 5 year coverage at 33%. The DPR for 2024 for Cash Flow per Share (CFPS) is good at 26% with 5 year coverage at 27%. The DPR for 2024 for Free Cash Flow (FCF) is good at 29% with 5 year coverage at 28%. There is no agreement on what FCF is.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 39.16% | 38.08% |
| AEPS | 32.99% | 33.37% |
| CFPS | 26.00% | 27.38% |
| FCF | 29.14% | 28.91% |
Debt Ratios are mostly fine, but they have a lot of debt. The Long Term Debt/Market Cap Ratio for 2024 is fine at 0.78 and currently at 0.71. The Liquidity Ratio for 2024 is good at 3.39 and 3.39 currently. The Debt Ratio for 2024 is a bit low at 1.44 and 1.44 currently. I prefer this to be 1.50 or high. The Leverage and Debt/Equity Ratios for 2024 are too high at 3.28 and 2.28 and currently at 3.28 and 2.28. I prefer these ratios to be below 3.00 and 2.00.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.78 | 0.71 |
| Intang/GW | 0.20 | 0.19 |
| Liquidity | 3.39 | 3.39 |
| Liq. + CF | 7.84 | 7.69 |
| Debt Ratio | 1.44 | 1.44 |
| Leverage | 3.28 | 3.28 |
| D/E Ratio | 2.28 | 2.28 |
The Total Return per year is shown below for years of 5 to 20 to the end of 2024. 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 chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. | check |
|---|---|---|---|---|---|---|
| 2019 | 5 | 9.75% | 15.46% | 13.26% | 2.20% | 15.46% |
| 2014 | 10 | 9.69% | 14.34% | 12.06% | 2.28% | 14.34% |
| 2009 | 15 | 9.27% | 16.73% | 13.90% | 2.83% | 16.73% |
| 2004 | 20 | 11.15% | 14.05% | 11.57% | 2.49% | 14.05% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 15.06, 18.45 and 21.84. The corresponding 10 year ratios are 16.15, 18.85 and 22.01. The corresponding historical ratios are 15.06, 17.19 and 18.46. The current P/E Ratio 18.75 based on a stock price of $280.11 and EPS estimate for 2025 of $15.11. The current ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Earnings per Share Ratios are 12.78, 15.66 and 18.54. The corresponding 10 year ratios are 15.38, 16.72 and 18.67. The current P/AEPS Ratio is 16.95 based on a stock price of $280.11 and AEPS estimate for 2025 of $16.53. The current ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a Graham Price of $194.53. The 10-year low, median, and high median Price/Graham Price Ratios are 1.16, 1.27 and 1.42. The current P/GP Ratio is 1.44 based on a stock price of $280.11. This ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Book Value per Share Ratio of 2.15. The current P/B Ratio is 2.75 based on Book Value per Share of $101.75, Book Value of $18,148M and a stock price of $280.11. The current ratio is 29% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Cash Flow per Share Ratio of 12.87. The current ratio is 14.75 based on Cash Flow for the last 12 months of $3,387M, Cash Flow per Share of $18.99 and a stock price of $280.11. The current ratio is 15% 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 2.56%. The current dividend yield is 1.90% based on a stock price of $280.11 and Dividends of $5.32. The current dividend yield is 26% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median dividend yield of 2.44%. The current dividend yield is 1.90% based on a stock price of $280.11 and Dividends of $5.32. The current dividend yield is 22% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
The 10-year median Price/Sales (Revenue) Ratio is 1.72. The current P/S Ratio is 2.16 based on a stock price of $280.11, Revenue estimate for 2025 of $23,179 and Revenue per Share of $129.95. The current ratio is 26% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
Results of stock price testing is that the stock price is probably relatively expensive. The dividend yield tests are saying this and it is confirmed by the P/S Ratio test. The rest of the testing goes from relatively reasonable, but above the median to expensive.
When I look at analysts’ recommendations, I find Strong Buy (2), Buy (6), Hold (4). The consensus would be a Buy. The 12 month stock price consensus is $302.83 with a high of $324.00 and low of $290.00. The consensus stock price of $302.83 implies a total return of 10.01% with 8.11% from capital gains and 1.90% from dividends.
Most of the recommendations on Stock Chase are a buy, but there is one Hold. Adam Othman on Motley Fool thinks this is a stock to buy and hold forever. Joey Frenette on Motley Fool thinks this is fantastic dividend growth stock. The company put out a Press Release via Newswire about their fourth quarter of 2024 results
Simply Wall Street via Yahoo Finance talks about this company and its dividends. Simply Wall Street gives this stock 2 and one half stars out of 5.
They have one warning of Significant insider selling over the past 3 months. I noticed this at INK, but I find a problem with how they treat stock options. They seem to treat them as sells if not picked up. I follow 5 officers, including the CEO and CFO and they all bought shares within the past year. I follow 3 directors, including the Chairman. Only the Chairman bought more shares within the last year. None of the people I follow sold any shares.
Intact Financial Corp is a property and casualty insurance company that provides written premiums in Canada. Most of the company’s direct premiums are written in the personal automotive space. Its web site is here Intact Financial Corp.
The last stock I wrote about was about was Russel Metals Inc (TSX-RUS, OTC-RUSMF) … learn more. The next stock I will write about will be Choice Properties REIT (TSX-CHP.UN, OTC-PPRQF) … learn more on Wednesday, February 26, 2025 around 5 pm. Tomorrow on my other blog I will write about TFSA …. learn more on Tuesday, February 25, 2025 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. 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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