The Company in a Nutshell
- Intact has developed a strong expertise in underwriting insurance contracts.
- This market is highly fragmented as the top 5 insurers only cover 47% of the market and IFC has 17% of it.
- The company uses a multi-channel distribution strategy enabling additional growth in the market.
- Download PDF format (Last reviewed: Sept 9th 2019)
|PRO Rating||4||Dividend Yield||2.00%|
|Dividend Safety||4||Dividend Growth Since||2006|
|DDM Valuation||-22.90%||Dividend Frequency||Quarterly|
Intact Financial Corporation provides property and casualty insurance in British Columbia, Alberta, Ontario, Quebec and Nova Scotia. It distributes insurance under the Intact Insurance brand through a network of brokers, and its subsidiary, BrokerLink. IFC is the largest provider of P&C insurance in Canada with almost $8 billion in annual direct premiums written (“DPW”) and an estimated market share of 17%.
|General Information||GE Data|
|Expected Earnings Date||ERR: NO DATA|
|Next ex-dvd date||2020-03-13|
IFC is one of the best managed P&C insurance companies in Canada. Through a strict underwriting process and careful portfolio management, IFC has proven its value to investors over time. Through its size, IFC benefits from lots of data to improve its underwriting. This also allows IFC to enter into smaller niche insurance markets that are usually more profitable. Since the insurance market in Canada is quite fragmented, there are plenty of possibilities for growth in the upcoming years without having real threats to the IFC business model. The acquisition of OneBeacon opens the door to the U.S. business and reinforces IFC’s ability to underwrite smaller business insurance.
|5-Yr Rev. Growth:||7.45%|
|5-Yr EPS Growth:||-2.58%|
|5-Yr Div Growth:||9.63%|
As good as IFC could be in the underwriting business, no insurance company is sheltered from natural catastrophes. Unfortunately, those tend to happen more often and cause more damages as climate evolves. Forest fires and floods seem to be the most important hazards Intact must consider. The company’s adventure in the U.S. is just starting, many Canadian companies failed to understand our southern neighbors.
|Financial Debt to EBITDA (TTM)||#VALUE!|
|Current Ratio (Quarterly)||3.01|
|Free Cash Flow (Quarterly)($B)||0.16|
Dividend Growth Perspective
Over the past 5 years, IFC increased its payouts by 9.73% CAGR (annualized rate). The company is very cautious about its dividend increases and maintains a low payout ratio to insure future growth. The stock may offer only ~2.25%, but we remain quite positive for the future and expect a high-single digit dividend growth rate for the long-term.
|Payout Ratio (%)||62.86%|
|Cash Payout Ratio (%)||38.03%|
|Enter Expected Dividend Growth Rate Years 1-10:||8.00%|
|Enter Expected Terminal Dividend Growth Rate:||7.00%|
|Calculated Intrinsic Value OUTPUT 15-Cell Matrix||Metric2||Metric3||Metric4|
|Discount Rate (Horizontal)||Discount Rate (Horizontal)||Discount Rate (Horizontal)|
|Margin of Safety||9.00%||10.00%||11.00%|
|Market Cap ($)||22B|
|Price to Book Ratio||2.82|
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- Dividend triangle chart is updated every 6 months.
- All other metrics are updated every 5 minutes (price) or weekly.
- The PDF format includes only comments (no metrics) and are reviewed every 6 months.