Intact Financial Corp's Dividend Analysis
Understanding Intact Financial Corp's Upcoming Dividend and Historical Payouts
Intact Financial Corp (IFCZF) recently announced a dividend of $1.1 per share, payable on 2023-12-29, with the ex-dividend date set for 2023-12-14. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Intact Financial Corp's dividend performance and assess its sustainability.
What Does Intact Financial Corp Do?
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Intact Financial Corp is a property and casualty insurance company that provides written premiums in Canada. The company distributes insurance under the Intact Insurance brand through a network of brokers and a wholly-owned subsidiary, BrokerLink, and directly to consumers through Belairdirect. Most of the company's direct premiums are written in the personal automotive space. Intact directly manages its investments through subsidiary Intact Investment Management. The vast majority of these invested assets are fixed-income securities. Its asset mix is designed to generate interest and dividend income.
A Glimpse at Intact Financial Corp's Dividend History
Intact Financial Corp has maintained a consistent dividend payment record since 2005. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Intact Financial Corp's Dividend Yield and Growth
As of today, Intact Financial Corp currently has a 12-month trailing dividend yield of 2.06% and a 12-month forward dividend yield of 2.07%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Intact Financial Corp's annual dividend growth rate was 9.60%. Extended to a five-year horizon, this rate decreased to 8.60% per year. And over the past decade, Intact Financial Corp's annual dividends per share growth rate stands at 9.30%.
Based on Intact Financial Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Intact Financial Corp stock as of today is approximately 3.11%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Intact Financial Corp's dividend payout ratio is 0.73, which may suggest that the company's dividend may not be sustainable.
Intact Financial Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Intact Financial Corp's profitability 7 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Intact Financial Corp's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Intact Financial Corp's revenue has increased by approximately 14.00% per year on average, a rate that outperforms approximately 81.15% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Intact Financial Corp's earnings increased by approximately 34.10% per year on average, a rate that outperforms approximately 85.56% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 22.50%, which outperforms approximately 87.63% of global competitors, indicates a strong potential for continued financial health and dividend payouts.
Next Steps for Investors
Considering Intact Financial Corp's consistent dividend payments, solid growth rate, manageable payout ratio, and strong profitability and growth metrics, the company presents an attractive proposition for value investors focused on dividend income. While the payout ratio may raise some concerns, the company's financial health appears robust, supporting the possibility of sustainable dividends. Investors looking for high-dividend yield stocks can find more opportunities using the High Dividend Yield Screener on GuruFocus.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
