For 2023, we have singled-out growth stocks we think offer exceptional prospects in the year ahead. Intact Financial is a market leader in its sector.
What’s more, a recent general and specialty insurance acquisition has expanded the company’s reach into the U.K.
Meanwhile the stock trades at an affordable 16.2 times the company’s 2023 earnings forecast.
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INTACT FINANCIAL CORP. (Toronto symbol IFC; www.intactfc.com) gives investors exposure to Canada’s largest provider of property and casualty insurance. Intact covers more than five million individuals and businesses. Its major brands are Intact Insurance, Canada BrokerLink and belairdirect.
With the March 2023 payment, the company raised your quarterly dividend by 10.0%. Investors now receive $1.10 a share instead of $1.00. The new annual rate of $4.40 yields a solid 2.2%.
In a bid to add value for investors, the company acquired OneBeacon Insurance Group for $1.7 billion U.S. in September 2017. The Minnesota-based insurance holding company focuses on property-casualty insurance. Through its businesses, the firm provides a range of specialty insurance products. That acquisition has been a big success for Intact.
Blue Chip Stocks: Intact Financial’s latest acquisition helps grow revenue and earnings
Then, on June 1, 2021, to further add value, the company—in conjunction with Danish insurer Tryg A/S—completed its $9.3 billion U.S. takeover of U.K.-based RSA Insurance Group plc.
RSA offers a range of general and specialty insurance products and had long been viewed as a possible takeover target. Under the transaction, Intact took RSA’s Canadian business as well as its U.K. and international division. Tryg now owns RSA’s operations in Sweden and Norway.
RSA’s Denmark business remained jointly owned by the two firms—but they have just completed the sale of the unit for $2.52 billion. Intact received 50% of the proceeds.
For the three months ended March 31, 2023, Intact’s revenue rose 3.3%, to $4.81 billion from $4.66 billion a year earlier. Overall earnings per share rose 4.4%, to $3.06 from $2.93.
Growth by acquisition adds risk, especially with a string of deals as big as RSA. However, Intact has a long track record of successfully integrating its acquisitions.
The insurer has raised its dividend an average of 9.5% annually over the past five years. Intact’s TSI Dividend Sustainability Rating is Above Average.
Recommendation in Dividend Advisor: Intact Financial Corp. is a buy.