Exploring the Dividend Performance, Growth, and Sustainability of Intact Financial Corp (IFCZF, Financial)
Intact Financial Corp(IFCZF) recently announced a dividend of $1.1 per share, payable on 2023-09-29, with the ex-dividend date set for 2023-09-14. 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 deep dive into Intact Financial Corps dividend performance and assess its sustainability.
What Does Intact Financial Corp Do?
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 2.16% and a 12-month forward dividend yield of 2.31%. 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 3.26%.
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 2023-06-30, Intact Financial Corp's dividend payout ratio is 0.59.
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 2023-06-30, suggesting good profitability prospects. The company has reported positive net income for each of 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.
Revenue is the lifeblood of any company, and Intact Financial Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Intact Financial Corp's revenue has increased by approximately 14.00% per year on average, a rate that outperforms than approximately 81.22% 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 38.40% per year on average, a rate that outperforms than approximately 87.98% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 23.70%, which outperforms than approximately 87.32% of global competitors.
Concluding Thoughts
Intact Financial Corp's consistent dividend payments, impressive growth rate, and sound payout ratio indicate a promising future for its dividend performance. The company's strong profitability and robust growth metrics further enhance its ability to sustain and grow dividends in the long run. However, as always, investors should consider their individual risk tolerance and investment goals before making any investment decisions.
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